Micron Technology's stock (NASDAQ: MU) experienced a sharp decline of nearly 30% from its March 18 all-time high, a selloff triggered by Google's unveiling of its TurboQuant AI memory-compression technology. The algorithm, announced by Alphabet, is claimed to reduce the memory required to run large language models by up to six times, spooking investors in the memory sector and raising questions about long-term demand for Micron's products.
The drop occurred despite Micron posting record fiscal second-quarter results for 2026, with revenue soaring to $23.86 billion from $8.05 billion a year earlier. CEO Sanjay Mehrotra emphasized that memory has become a "strategic asset" in the AI era. The company also provided strong guidance, forecasting fiscal Q3 revenue of about $33.5 billion and planning capital spending exceeding $25 billion for fiscal 2026.
Analysts, however, have largely pushed back against the market's negative reaction. Morgan Stanley analyst Joseph Moore reiterated a Buy rating, calling the selloff a "healthy pricing in of durability concerns." He clarified that TurboQuant targets memory use in one specific part of an AI model and is an "evolutionary development" that does not structurally break the investment thesis for memory chips. Moore highlighted that supply remains tight, with customers locking in large-volume contracts, and that Micron can only meet between half and two-thirds of current High-Bandwidth Memory (HBM) demand, with new capacity not expected until 2027.
The broader Wall Street consensus remains strongly positive, with 26 of 28 tracked analysts maintaining Buy ratings. The average 12-month price target is $536.55, implying roughly 51% upside from current levels, while the street-high target of $700 suggests a potential 96% gain. The total HBM market is projected to grow from $35 billion in 2025 to $100 billion by 2028, with Micron positioned as a key beneficiary of AI infrastructure spending, particularly in DRAM, NAND, and HBM.
