A number of stocks fell in the afternoon session after investors reacted to news of Google’s new TurboQuant algorithm, a tool that threatens to significantly reduce memory requirements for artificial intelligence models.
The market’s interpretation is that this increased efficiency could lead to a structural decrease in demand for memory chips, sparking a sector-wide sell-off. Sandisk saw its stock fall by as much as 8%. The concerns generated by Google’s announcement overshadowed recent strong earnings from memory-makers. Adding to the sector’s headwinds are reports that competitor SK Hynix is considering a potential $14 billion U.S. listing, which would increase competitive supply pressure in the market.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
Lam Research’s shares are extremely volatile and have had 30 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 10 days ago when the stock gained 3.4% on the news that investor enthusiasm for the artificial intelligence hardware boom, fueled by key company announcements and anticipation for Nvidia’s GTC 2026 conference. The sector experienced a significant uplift as the industry pivoted toward hardware-led innovation. Analysts at Frost & Sullivan have also highlighted that 2026 is expected to feature a shift towards hardware, with next-generation semiconductors enabling faster and more efficient AI processing.
