Micron Technology reported a record-breaking fiscal second quarter, with revenue jumping more than 190% year-over-year to $23 billion. The company also hit records in gross margin, earnings per share, and free cash flow. It looked like a clean sweep.
Then Google showed up.
Alphabet unveiled TurboQuant, a compression method the company says could reduce the memory needed to run large language models by up to six times. That announcement sent MU and other memory stocks into a sharp retreat.
SanDisk (SNDK) dropped 11% on the news. Micron fell around 20% over just five trading sessions. Some of that pressure also came from concerns about heavy capital spending planned for fiscal 2027.
Despite strong quarterly results, the market’s reaction reflected fears that demand for memory — the core of Micron’s business — could be structurally weaker going forward if AI models need less of it.
Not everyone is convinced the selloff makes sense. Morgan Stanley analyst Joseph Moore — a five-star analyst — reiterated a Buy rating on both Micron and SanDisk after the drop.
Moore described the selloff as a “healthy pricing in of durability concerns” rather than a signal of fundamental damage. He told clients that those drawing parallels to prior memory cycles are missing the point this time around.
On TurboQuant specifically, Moore said it is an “evolutionary development, with basically no surprises for memory,” after speaking with industry contacts. He sees memory shortages as intensifying, not easing, with customers paying upfront for large-volume deals because they expect tight supply to persist.
At current earnings levels, Moore expects Micron and SanDisk to generate annual cash equal to 15%-25% of their current market caps. He thinks that level of cash generation “is going to last for long enough to see the stocks move materially higher.”
The next phase of AI growth centers on inference — the process by which large language models “think” through problems in real time. That process runs continuously and requires sustained memory use, which Micron is positioned to supply through its DRAM, NAND, and high bandwidth memory (HBM) products.
Micron’s current valuation has drawn comparisons to the Magnificent Seven. On a forward price-to-earnings basis, Micron trades cheaper than several of its AI-adjacent peers, including Nvidia and Alphabet, both of which have also pulled back in recent weeks.
Wall Street’s consensus sits at a Strong Buy, with 26 Buy ratings and just two Holds. The average price target of $536.55 implies around 51% upside from current levels.
The stock is still up approximately 286% over the past year, even after the recent pullback.
Micron’s 52-week range runs from $61.54 to $471.34, putting the current price of $355.62 well off its highs but far above its lows.
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