Alphabet Just Crashed The Memory Trade: Sandisk Looks Like The Winner (Upgrade)
Seeking Alpha • • business
Key Points:
- Alphabet's recent focus on TurboQuant, an algorithm reducing KV-cache memory needs by at least 6x during AI inference, has pressured memory stocks, including Sandisk Corporation (SNDK).
- Despite this, TurboQuant does not reduce persistent SSD storage demand, supporting the continued relevance of Sandisk's NAND storage business.
- Sandisk's data center revenue, currently 15% of total sales, showed strong growth with 64% sequential and 76% year-over-year increases last quarter, indicating early-stage AI storage adoption.
- The author remains bullish on Sandisk, expecting near-term volatility due to macroeconomic risks but foresees the stock retesting new highs in the second half of the year as capital may shift away from DRAM-focused companies.
- Current sell-offs appear driven by headlines and risk-off market sentiment rather than changes in revenue or earnings estimates, which remain stable for the next four years.
