Key Takeaways
- Google’s newly unveiled TurboQuant algorithm sparked significant declines across memory and storage equities
- Investment analysts at Bernstein argue TurboQuant poses no threat to HDD demand and minimal risk to NAND
- Western Digital received an upgrade to Outperform alongside a price target increase from $170 to $340
- Seagate’s price objective was elevated to $620 from $500; Sandisk maintained at $1,000
- The three storage companies have experienced pullbacks ranging from 17% to 26% from peak levels
When Google unveiled its TurboQuant algorithm on March 24, 2026, storage and memory sector equities experienced a swift downturn.
Western Digital retreated 21% from its recent peak. Seagate declined 17%. Sandisk suffered the most severe correction, tumbling 26%. The bulk of these declines occurred in the immediate aftermath of the TurboQuant disclosure.
TurboQuant represents an inference optimization technology. The algorithm slashes KV cache memory requirements by a factor of six and achieves inference performance improvements up to eight times on Nvidia H100 GPUs, without sacrificing accuracy.
The technology operates exclusively during inference phases, not throughout AI model training cycles. It doesn’t apply compression to model weights, training datasets, or any persistent storage data.
Bernstein Société Générale Group’s research team characterizes the market’s response as excessive. In a Tuesday research note, they contended the downturn has generated attractive entry points across these three storage names.
The Case for Hard Disk Drive Resilience
Led by analyst Mark Newman, the Bernstein team explained that TurboQuant’s effects are confined to GPU high-bandwidth memory and system DRAM. NAND flash experiences only tangential exposure, primarily when utilized for cold cache offloading.
“HDD demand faces zero impact,” the research team emphasized. They further noted that NAND repercussions are negligible and fail to alter the fundamental trajectory for storage technologies.
Bernstein elevated Western Digital from Market Perform to Outperform status. The investment house increased its valuation target from $170 to $340. At the upgrade announcement, Western Digital traded at $251.67, reflecting a 16% weekly decline.
Western Digital’s PEG ratio currently registers at 0.12, which the firm interprets as indicating substantial growth prospects relative to current market valuation. Seventeen Wall Street analysts have recently adjusted their profit forecasts higher.
Seagate retained its Outperform designation. Bernstein boosted its price objective from $500 to $620. Seagate’s Q2 FY2026 results showed non-GAAP earnings per share of $3.11, surpassing analyst consensus. Gross margin performance reached 42.2%.
Corporate Developments at Sandisk and Western Digital
Seagate’s Q3 revenue guidance projects $2.90 billion with earnings per share forecasted at $3.40.
Sandisk maintained both its Outperform rating and $1,000 price target from Bernstein. Western Digital recently submitted regulatory filings indicating plans to divest up to 7.5 million Sandisk shares, though Sandisk will not receive any capital from these transactions.
Western Digital additionally converted 5.8 million Sandisk shares, valued at $545 per share, into debt reduction instruments. This transaction formed part of a comprehensive balance sheet optimization strategy. Subsequently, S&P Global Ratings elevated Western Digital’s creditworthiness to BBB- with a stable forward outlook.
The storage manufacturer also completed full redemption of its outstanding 4.75% Senior Notes scheduled to mature in 2026.
Cantor Fitzgerald increased its Western Digital price target to $420 with an Overweight stance following the company’s Innovation Day presentation. Morgan Stanley advanced its target to $369, highlighting accelerating AI storage infrastructure demand.
Bernstein’s updated financial model projects combined revenues for Western Digital and Seagate will expand at a 24% compound annual growth rate spanning FY2025 through FY2030.
