Beware the boom and bust cycle of memory stocks, investors warn amid AI boom
The introduction of TurboQuant by Google may significantly impact the demand for AI memory chips, which are essential for training large language models. Analysts caution that while the current supply is constrained, the market could face a shakeout due to high share prices and momentum crowding. Investors are advised to remain cautious as the memory sector has historically shown average returns on capital.
- ▪Google unveiled TurboQuant, a new compression method that could reduce memory requirements for AI models by six times.
- ▪The release of TurboQuant led to a sharp decline in the share prices of major memory providers.
- ▪Analysts warn that the memory sector is vulnerable to a shakeout due to high share prices and momentum crowding.
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| Canonical URL | https://www.cnbc.com/2026/05/25/memory-stocks-cyclical-boom-bust-samsung-sk-hynix.html |
| Publication time | Mon, 25 May 2026 05:00:01 GMT |
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Though memory chip supply is extremely constrained at present, Alphabet's Google on March 24 unveiled TurboQuant, a new compression method, which it says could reduce the amount of memory required to run large language models by six times. It is designed to make AI models more efficient, a major goal of the leading labs.Such developments have the potential to slash demand for AI memory chips, which have been a critical component to train up huge LLMs from companies like Google, OpenAI and Anthropic.
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