Semiconductor Stocks Under Pressure as Memory Becomes AI Bottleneck
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy GOOG?
Source: Yahoo Finance
- Market Pullback: Over the past month, the iShares Semiconductor ETF (SOXX) has dropped approximately 10%, as investors grow cautious about valuations, demand trends, and the sustainability of recent gains, leading to a bearish market sentiment.
- Memory Bottleneck: Morgan Stanley highlights that memory has become the bottleneck for AI growth; despite Micron (MU) being up 25% year-to-date, the recent pullback reflects concerns over capital expenditures and demand destruction, indicating that the market's view on memory companies may be overly pessimistic.
- Impact of Google's TurboQuant: Morgan Stanley asserts that the impact of Google's TurboQuant compression technology on memory demand is overestimated, as it only applies to KV cache memory rather than overall memory usage, suggesting that memory demand will remain robust.
- Strong Earnings Outlook: Micron reported a record gross margin of 81% for the fiscal second quarter of 2026, with revenue reaching $23.86 billion, nearly tripling from the previous year; Morgan Stanley expects memory companies' earnings to remain strong in the coming quarters, supported by limited supply growth and strong pricing power.
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Analyst Views on GOOG
Wall Street analysts forecast GOOG stock price to rise
15 Analyst Rating
14 Buy
1 Hold
0 Sell
Strong Buy
Current: 280.740
Low
255.00
Averages
336.08
High
400.00
Current: 280.740
Low
255.00
Averages
336.08
High
400.00
About GOOG
Alphabet Inc. is a holding company. The Company's segments include Google Services, Google Cloud, and Other Bets. The Google Services segment includes products and services such as ads, Android, Chrome, devices, Google Maps, Google Play, Search, and YouTube. The Google Cloud segment includes infrastructure and platform services, collaboration tools, and other services for enterprise customers. Its Other Bets segment is engaged in the sale of healthcare-related services and Internet services. Its Google Cloud provides enterprise-ready cloud services, including Google Cloud Platform and Google Workspace. Google Cloud Platform provides access to solutions such as artificial intelligence (AI) offerings, including its AI infrastructure, Vertex AI platform, and Gemini for Google Cloud; cybersecurity, and data and analytics. Google Workspace includes cloud-based communication and collaboration tools for enterprises, such as Calendar, Gmail, Docs, Drive, and Meet.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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