Shares of data storage manufacturer Seagate (NASDAQ:STX) fell 8% in the afternoon session after Google unveiled a new AI model, named TurboQuant, which could reduce the amount of memory needed to run large language models.
The new technique focuses on making AI models more efficient by reducing the need to store and re-run past calculations. For memory-chip makers like Seagate, this innovation raised concerns among investors about potentially lower future demand for their products. The negative sentiment was felt across the sector, with other memory stocks such as Micron and Sandisk also pulling back following the news.
The shares closed the day at $378.81, down 8.3% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Seagate? Access our full analysis report here, it’s free.
Seagate’s shares are extremely volatile and have had 44 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 3.1% 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.
Seagate is up 32.9% since the beginning of the year, but at $382.39 per share, it is still trading 14.4% below its 52-week high of $446.57 from January 2026. Investors who bought $1,000 worth of Seagate’s shares 5 years ago would now be looking at an investment worth $5,027.
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