What Happened?

A number of stocks fell in the afternoon session after investors reacted to news of Google's new TurboQuant algorithm, a tool that threatens to significantly reduce memory requirements for artificial intelligence models. 

The market's interpretation is that this increased efficiency could lead to a structural decrease in demand for memory chips, sparking a sector-wide sell-off. Sandisk saw its stock fall by as much as 8%. The concerns generated by Google's announcement overshadowed recent strong earnings from memory-makers. Adding to the sector's headwinds are reports that competitor SK Hynix is considering a potential $14 billion U.S. listing, which would increase competitive supply pressure in the market.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Semiconductor Manufacturing company Kulicke and Soffa (NASDAQ: KLIC) fell 4.6%. Is now the time to buy Kulicke and Soffa? Access our full analysis report here, it’s free.
• Semiconductor Manufacturing company Lam Research (NASDAQ: LRCX) fell 8.9%. Is now the time to buy Lam Research? Access our full analysis report here, it’s free.
• Analog Semiconductors company Monolithic Power Systems (NASDAQ: MPWR) fell 4.1%. Is now the time to buy Monolithic Power Systems? Access our full analysis report here, it’s free.
• Analog Semiconductors company MACOM (NASDAQ: MTSI) fell 5.4%. Is now the time to buy MACOM? Access our full analysis report here, it’s free.
• Semiconductor Manufacturing company FormFactor (NASDAQ: FORM) fell 6%. Is now the time to buy FormFactor? Access our full analysis report here, it’s free.

Zooming In On Lam Research (LRCX)

Lam Research’s shares are extremely volatile and have had 30 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 10 days ago when the stock gained 3.4% on the news that investor enthusiasm for the artificial intelligence hardware boom, fueled by key company announcements and anticipation for Nvidia's GTC 2026 conference. The sector experienced a significant uplift as the industry pivoted toward hardware-led innovation. Analysts at Frost & Sullivan have also highlighted that 2026 is expected to feature a shift towards hardware, with next-generation semiconductors enabling faster and more efficient AI processing.

Lam Research is up 14.4% since the beginning of the year, but at $211.56 per share, it is still trading 15.2% below its 52-week high of $249.48 from February 2026. Investors who bought $1,000 worth of Lam Research’s shares 5 years ago would now be looking at an investment worth $3,625.

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