Memory stocks such as Micron surge: "Concerns over TurboQuant are exaggerated"

[Financial News]

Micron Technology and other memory semiconductor names on the NYSE surged on the 1st.
At one point during the session, Micron Technology was up nearly 12%.
Risk appetite returned to the market on hopes that the war involving Iran is nearing its end. At the same time, analysts began to argue that last week’s fears over Google LLC’s "TurboQuant" algorithm, which had slammed memory stocks, were overstated, and this view started to gain traction.

According to Barron's, memory stocks were exceptionally strong on the day.
Micron Technology jumped 30.01 dollars, or 8.88%, to close at 367.85 dollars, while Western Digital (WD) soared 27.24 dollars, or 10.07%, to 297.73 dollars.
Seagate Technology climbed 31.36 dollars, or 8.00%, to 423.12 dollars, and SanDisk Corporation leapt 57.39 dollars, or 9.03%, to finish at 692.73 dollars.
Despite posting a surprise earnings beat after the close on the 18th, Micron Technology’s share price had plunged 30.3% between the 19th of last month and the 30th, hit by growing skepticism over Artificial Intelligence (AI) and panic about TurboQuant. However, the stock rebounded nearly 5% on the 31st and then surged close to 12% on the 1st. Based on the closing price, it has soared more than 14% over the past two sessions.

The recent rally has been driven by a series of expert assessments that the earlier sell-off, triggered when Google LLC unveiled its AI memory compression algorithm TurboQuant, was overdone. As these views spread, investor confidence began to recover.
TurboQuant is a technology that can reduce the memory required by a Large Language Model (LLM) by up to 83%.
This sparked fears in the market that if AI no longer needs massive amounts of memory, the current memory shortage could soon be resolved and long‐term demand forecasts for memory would have to be sharply revised downward.
However, some experts pointed to the "Jevons paradox" to argue that memory demand could actually increase. They noted that if memory requirements can be cut dramatically, it may become possible to run AI models offline on devices such as smartphones, which in turn could further boost memory demand.
Citing these factors, Morgan Stanley reaffirmed its "overweight" (buy) rating on Micron Technology. Morgan Stanley stated that memory supply remains a critical bottleneck for AI development and predicted that the strength in memory stocks will last longer than the market currently expects.
dympna@fnnews.com Song Kyung-jae Reporter