Key Takeaways
- A sharp selloff hit memory and storage equities following Google’s unveiling of its TurboQuant algorithm
- Bernstein analysts argue TurboQuant poses no threat to HDD demand and minimal risk to NAND
- Western Digital received an upgrade to Outperform alongside a price target boost from $170 to $340
- Seagate saw its target lifted from $500 to $620; Sandisk maintained its $1,000 target
- The three storage names have declined 17% to 26% from recent peak levels
On March 24, 2026, Google unveiled TurboQuant, an advanced inference optimization algorithm. The disclosure triggered widespread declines among memory and storage equities.
Western Digital retreated 21% from its recent peak. Seagate declined 17%. Sandisk experienced the sharpest drop at 26%. The bulk of these losses materialized in the immediate aftermath of the TurboQuant disclosure.
TurboQuant functions as an inference optimization tool. It slashes KV cache memory consumption by a factor of six while delivering inference performance improvements of up to eight times on Nvidia H100 GPUs, all without sacrificing accuracy.
The technology operates exclusively during the inference phase, not during AI model training. It does not alter model weights, training datasets, or any stored data at rest.
Bernstein Société Générale Group analysts view the market’s response as excessive. In a Tuesday report, they contend the downturn has generated attractive entry points across all three storage companies.
Hard Disk Drive Demand Remains Intact, Says Bernstein
Analysts at Bernstein, under the leadership of Mark Newman, concluded that TurboQuant’s effects are confined to GPU high-bandwidth memory and system DRAM. Any influence on NAND remains indirect and relates solely to cold cache offloading.
“TurboQuant presents zero threat to hard disk drive demand,” the research team stated. They further noted that NAND exposure is negligible and does not alter the fundamental trajectory for storage solutions.
The firm elevated Western Digital from Market Perform to Outperform status. Bernstein simultaneously boosted its price objective from $170 to $340. At the time of the rating change, Western Digital shares traded at $251.67, reflecting a 16% decline over the prior week.
Western Digital’s PEG ratio currently sits at 0.12, a metric analysts interpret as indicating robust growth prospects relative to current valuation levels. Seventeen sell-side analysts have recently increased their earnings projections for the company.
Bernstein maintained Seagate’s Outperform designation while elevating its price objective from $500 to $620. Seagate delivered second-quarter fiscal 2026 non-GAAP earnings of $3.11 per share, surpassing consensus forecasts. Gross margin reached 42.2%.
Corporate Developments at Sandisk and Western Digital
Seagate’s third-quarter outlook projects revenue of $2.90 billion with earnings per share of $3.40.
Sandisk retained its Outperform designation and $1,000 price objective from Bernstein. Western Digital recently disclosed plans to divest up to 7.5 million Sandisk shares, though Sandisk will not receive any proceeds from the transaction.
Western Digital also converted 5.8 million Sandisk shares, priced at $545 each, into debt retirement. This action formed part of a comprehensive liability reduction initiative. In response, S&P Global Ratings elevated Western Digital’s credit rating to BBB- with a stable outlook designation.
The firm also completed the redemption of all remaining 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 raised its target to $369, citing robust demand for AI-focused storage infrastructure.
Bernstein now projects combined revenue for Western Digital and Seagate will expand at a 24% compound annual growth rate spanning fiscal 2025 through fiscal 2030.
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