Sandisk bounces off 50-day moving average amid reprieve for memory stocks

Sandisk shares bounced off their 50-day moving average Friday, ending a multiday bloodbath for the stock that sent it down as much as 15% from where it closed last week.

The worst of the slump came as Google Research disclosed details this week of its TurboQuant AI algorithm, which Google said could allow AI language models to operate more efficiently, cutting demand for memory storage at AI data centers.

Sandisk tumbled in response, along with other AI memory trade stocks such as Micron, Western Digital, and Seagate Technology Holdings, which have been some of the market’s top performers this year.

Friday’s reprieve comes as analysts have emphasized the so-called Jevons Paradox implications of the TurboQuant news.

That is, if the Google algorithm lowers the amount of memory required for AI operations, it could make data centers more affordable and cheaper to use, resulting in more investment and thus more sales of memory products over time.

“In this scenario, lower memory requirements could then be offset by higher overall AI adoption and ultimately support inference-led storage demand rather than weaken it,” Citi analysts wrote in a note published Thursday after meeting with Sandisk executives. “This is counter to the initial market reaction, which was instead focused on the short-term view that more efficient AI models would simply reduce memory demand.”