Google Just Gave Sandisk Investors a Reason to Buy More
Shares of SanDisk (SNDK) took a hit Wednesday after Google unveiled its latest AI breakthrough. The memory specialist dropped more than 3.5% in a single session, joining a broader selloff across the chip sector. Investors worried that the new technology could crimp demand for the very memory products SanDisk makes. Yet history shows these knee-jerk reactions often create the best entry points—and this one looks no different.
Why TurboQuant Spooked the Memory Market
Google Research introduced TurboQuant, a quantization algorithm that compresses the key-value (KV) cache inside large language models. The KV cache acts like a high-speed digital cheat sheet, storing intermediate calculations so the model doesn't have to recompute them every time. TurboQuant slashes that memory footprint by at least 6x – down to just 3 bits per value – while delivering up to an 8x speedup on Nvidia H100 GPUs. Crucially, it does all this with zero accuracy loss on tasks like question answering, code generation, and summarization. No retraining required.
On the surface, the news sounds like bad news for memory makers. Less memory needed per AI query could mean fewer DRAM modules and NAND flash chips sold. SanDisk – a pure-play leader in flash storage after its spin-off from Western Digital (WDC) last year – felt the sting immediately. Yet the company has been one of the market's standout performers since breaking free. Since the February 2025 separation, SNDK has delivered explosive gains fueled by AI-driven demand for high-capacity storage. Shares are up 185% year-to-date, though they have pulled back more than 12% from their recent high amid Wednesday's volatility.
Analysts Push Back on the Bearish Narrative
Not every analyst is hitting the panic button. JPMorgan's trading desk pointed to Jevons Paradox, the 19th-century observation that greater efficiency in using a resource tends to increase overall consumption, not reduce it. Cheaper, faster AI inference doesn't shrink the market; it supercharges adoption. As context windows balloon and more companies deploy AI at scale, total memory demand could actually accelerate. Lower per-query costs simply unlock bigger workloads that wouldn't have been economical before.
Lynx Equity Strategies analyst KC Rajkumar offered an even more grounded take. He noted that Google's headline compression numbers are impressive but largely measured against older-generation baselines rather than the cutting-edge techniques already in widespread use. Real-world deployment timelines remain uncertain, and extreme supply constraints in the memory industry will keep pricing power intact for the next three to five years. Rajkumar called the dip a buying opportunity and maintained his bullish stance on the sector.
SanDisk's fundamentals remain rock-solid. The company sits at the heart of the AI infrastructure build-out, supplying the high-speed NAND flash that powers everything from training clusters to inference servers. With data centers still scrambling to keep up with exploding AI workloads, any efficiency gain from TurboQuant is more likely to expand the addressable market than shrink it.
Bottom Line
Google's TurboQuant announcement triggered a classic overreaction in memory stocks. SanDisk has already proven its ability to ride the AI wave, posting triple-digit returns since the spin-off. The 12%-plus pullback from recent highs hands long-term investors a fresh entry at a more reasonable valuation. For those who believe AI adoption is still in its early innings – and most evidence says it is – this dip isn't a warning sign. It's an invitation.