Alphabet’s (GOOGL) introduction of TurboQuant, a new compression algorithm designed to reduce memory requirements in large language models (LLMs), has created uncertainty for memory chip manufacturers, including SanDisk (SNDK). The technology improves efficiency by reducing the memory required to run artificial intelligence (AI) workloads, raising concerns about the future trajectory of demand for high-performance memory components.
Memory stocks, which have already witnessed a very strong run, came under pressure on the news. SanDisk, a key beneficiary of the AI-led demand, fell 11% on March 26. Notably, SNDK stock has delivered exceptional gains so far this year, rising 158% year-to-date (YTD) and surging 530% in the past six months. This rally has been driven primarily by strong demand linked to the rapid expansion of AI data centers, where memory products play a critical role in supporting compute-intensive applications.
