Bernstein Sees Opportunity in Seagate, Western Digital, and Sandisk After Sharp Falls – Time to Buy?

TLDR

• Google’s TurboQuant algorithm triggered a sell-off in memory and storage stocks last week
• Bernstein says TurboQuant has zero impact on HDD demand and only minor impact on NAND
• Western Digital was upgraded to Outperform with a price target raised to $340 from $170… wait — to $340? No — raised to $340 from $170 is listed in one source but $620/$500 is Seagate. Let me recheck and present accurately below.
• Bernstein upgraded Western Digital to Outperform, raising its price target to $340 from $170
• Seagate’s price target was raised to $620 from $500; Sandisk’s target held at $1,000
• All three stocks are down between 17% and 26% from recent highs

Google revealed its TurboQuant algorithm on March 24, 2026. The news sent memory and storage stocks sharply lower across the board.

Western Digital fell 21% from recent highs. Seagate dropped 17%. Sandisk saw the steepest fall, down 26%. Most of those losses came in the days following the TurboQuant announcement.

Sandisk Corporation, SNDK

TurboQuant is an inference optimization algorithm. It reduces KV cache memory usage by six times and delivers up to eight times better inference performance on Nvidia H100 GPUs, with no accuracy loss.

The algorithm works only during inference, not during AI model training. It does not compress model weights, training data, or any data stored at rest.

Analysts at Bernstein Société Générale Group say the market reaction was an overreaction. They published a report on Tuesday arguing the sell-off created a buying opportunity in all three stocks.

Why Bernstein Says HDDs Are Safe

Bernstein analysts, led by Mark Newman, said TurboQuant’s impact is limited to GPU high-bandwidth memory and system DRAM. It has some indirect impact on NAND, which is used only to offload cold caches.

Bernstein upgraded Western Digital from Market Perform to Outperform. The firm raised its price target from $170 to $340. Western Digital was trading at $251.67 at the time of the upgrade, down 16% over the past week.

Western Digital’s PEG ratio stands at 0.12, which analysts say points to strong growth potential relative to its valuation. Seventeen analysts have recently revised their earnings estimates upward.

Seagate’s Outperform rating was kept in place. Bernstein raised its price target from $500 to $620. Seagate reported Q2 FY2026 non-GAAP earnings per share of $3.11, beating consensus estimates. Gross margins came in at 42.2%.

Sandisk and Western Digital’s Recent Moves

Seagate’s Q3 guidance calls for revenue of $2.90 billion and earnings per share of $3.40.

Sandisk kept its Outperform rating and $1,000 price target from Bernstein. Western Digital recently filed to sell up to 7.5 million Sandisk shares, though Sandisk receives no proceeds from that sale.

Western Digital also exchanged 5.8 million Sandisk shares, valued at $545 each, for debt. This was part of a broader effort to cut liabilities. Following that move, S&P Global Ratings upgraded Western Digital’s credit rating to BBB- with a stable outlook.

The company also redeemed all outstanding 4.75% Senior Notes due 2026.

Cantor Fitzgerald raised its price target for Western Digital to $420 with an Overweight rating after the company’s Innovation Day event. Morgan Stanley lifted its target to $369, pointing to demand for AI storage.

Bernstein now expects the combined revenue of Western Digital and Seagate to grow at a 24% compound annual growth rate from FY2025 to FY2030.

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