What Happened?

A number of stocks fell in the afternoon session as 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 Teradyne (NASDAQ: TER) fell 7%. Is now the time to buy Teradyne? Access our full analysis report here, it’s free.
• Semiconductor Manufacturing company Applied Materials (NASDAQ: AMAT) fell 8%. Is now the time to buy Applied Materials? Access our full analysis report here, it’s free.
• Processors and Graphics Chips company Intel (NASDAQ: INTC) fell 6.6%. Is now the time to buy Intel? Access our full analysis report here, it’s free.
• Semiconductor Manufacturing company KLA Corporation (NASDAQ: KLAC) fell 5.6%. Is now the time to buy KLA Corporation? Access our full analysis report here, it’s free.
• Semiconductor Manufacturing company Semtech (NASDAQ: SMTC) fell 5.3%. Is now the time to buy Semtech? Access our full analysis report here, it’s free.

Zooming In On Applied Materials (AMAT)

Applied Materials’s shares are very volatile and have had 22 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 2 days ago when the stock gained 3.7% on the news that the Trump administration announced a plan to create a voluntary investment consortium targeting $4 trillion in funding for semiconductor supply chains, energy projects, and critical minerals. The initiative, an expansion of the 'Pax Silica' program launched in December 2025, aims to secure access to AI and chipmaking for the U.S. and its allies. According to reports, the U.S. government will contribute an initial $250 million toward the ambitious goal. This move signals strong government support for the domestic and allied chip industry, boosting investor confidence. The prospect of significant capital infusion into the sector could lead to the development of new manufacturing facilities, research advancements, and a more resilient global supply chain, benefiting chipmakers and related technology companies.

Applied Materials is up 25.8% since the beginning of the year, but at $338.15 per share, it is still trading 14.4% below its 52-week high of $394.95 from February 2026. Investors who bought $1,000 worth of Applied Materials’s shares 5 years ago would now be looking at an investment worth $2,629.

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