Key Takeaways
- Google’s TurboQuant algorithm announcement sparked widespread selling in memory and storage equities
- Analysts at Bernstein argue TurboQuant poses no threat to HDD demand and minimal risk to NAND
- Western Digital received an upgrade to Outperform from Market Perform, with a price target increase from $170 to $340
- Seagate’s price objective was lifted from $500 to $620 while maintaining an Outperform rating
- Sandisk retained its Outperform rating with a $1,000 price objective
- The trio of storage stocks has fallen 17% to 26% from their peak levels
When Google unveiled its TurboQuant algorithm on March 24, 2026, investors reacted swiftly. Memory and storage-related equities tumbled broadly in the immediate aftermath.
Western Digital declined 21% from its recent peak. Seagate experienced a 17% drawdown. Sandisk faced the most severe correction, sliding 26%. The bulk of these declines occurred in trading sessions immediately after TurboQuant’s introduction.
TurboQuant represents an inference optimization technology. The algorithm cuts KV cache memory requirements by a factor of six while delivering inference performance improvements of up to eight times on Nvidia H100 graphics processors, all without sacrificing accuracy.
The technology operates exclusively during the inference phase, not throughout AI model training processes. It doesn’t compress model weights, training datasets, or any information stored in persistent storage.
Research analysts at Bernstein Société Générale Group believe the market’s response was excessive. In a research note released Tuesday, they contended that the sell-off has created an attractive entry point for investors across all three companies.
Bernstein’s Case for Hard Drive Demand
The Bernstein team, headed by Mark Newman, explained that TurboQuant’s effects are confined to GPU high-bandwidth memory and system DRAM. The algorithm has some secondary influence on NAND flash, which serves only to handle cold cache offloading.
“There is zero impact to HDD demand,” the research team stated. They emphasized that NAND exposure is minimal and doesn’t alter the fundamental long-term trajectory for storage solutions.
Bernstein elevated Western Digital from Market Perform to Outperform status. The investment bank increased its price objective from $170 to $340. At the time of the rating change, Western Digital was changing hands at $251.67, reflecting a 16% decline over the preceding seven-day period.
Western Digital’s PEG ratio currently registers at 0.12, which the analysts interpret as indicating substantial growth prospects relative to current valuation levels. Seventeen separate analysts have recently adjusted their earnings projections higher.
Seagate maintained its Outperform designation. Bernstein elevated its price objective from $500 to $620. Seagate posted Q2 FY2026 non-GAAP earnings per share of $3.11, surpassing Wall Street consensus forecasts. Gross profit margins reached 42.2%.
Recent Corporate Actions at Sandisk and Western Digital
Seagate’s Q3 forward guidance anticipates revenue of $2.90 billion with earnings per share projected at $3.40.
Sandisk maintained its Outperform designation and $1,000 price objective from Bernstein. Western Digital recently submitted regulatory filings to divest up to 7.5 million Sandisk shares, though Sandisk will not receive any funds from the transaction.
Western Digital additionally swapped 5.8 million Sandisk shares, valued at $545 per share, for outstanding debt instruments. This transaction formed part of a comprehensive strategy to reduce balance sheet obligations. In response to this restructuring, S&P Global Ratings elevated Western Digital’s credit rating to BBB- with a stable outlook designation.
The organization also completed the redemption of all outstanding 4.75% Senior Notes scheduled to mature in 2026.
Cantor Fitzgerald increased its price objective for Western Digital to $420 with an Overweight recommendation following the corporation’s Innovation Day presentation. Morgan Stanley raised its target to $369, citing robust demand for AI-related storage infrastructure.
Bernstein currently forecasts that combined revenue for Western Digital and Seagate will expand at a 24% compound annual growth rate spanning FY2025 through FY2030.
