Google's Newest AI Development Could Produce a Surprising Winner

By Adam Levy – Apr 3, 2026 at 8:22AM ESTKey PointsGoogle's TurboQuant algorithm significantly reduces memory usage for large language models.Memory chipmakers could face pressure, but investors may be worrying too much.This industry, and one company in particular, could benefit greatly from reduced AI memory requirements.Google sent shockwaves through a small corner of the artificial intelligence (AI) market when it released new research that could significantly impact certain chipmakers. The Alphabet (GOOG 0.15%) (GOOGL 0.57%) subsidiary shared the results of its TurboQuant algorithm, which shrinks memory usage for large language model inference more than six-fold, the researchers said. Memory chipmakers have seen demand surge over the past year as the amount of data that graphics processing units (GPUs) and other AI accelerators have immediate access to proves to be a significant bottleneck in improving generative AI responses. With Google's breakthrough, it might not be such a bottleneck after all. But investors' buying and selling behaviors may be misplaced after the news. One stock could end up being a surprising winner of Google's AI development. Image source: Getty Images. Did memory chipmakers deserve a price cut? Shares of Micron (MU 0.49%), the leading U.S. memory chipmaker, and its Korean competitors SK Hynix and Samsung, all fell on the news of Google's TurboQuant. If AI chips can produce better results with less memory, the demand for memory won't grow nearly as quickly, the thinking goes. But improving efficiency shouldn't cause such alarm. TurboQuant opens the door for more advanced models using larger context windows to further improve responses and user experiences. Overall, the net effect should be relatively neutral in the long run. We saw a similar response in the market when DeepSeek unveiled its reasoning model a year ago. In fact, Cloudflare CEO Matthew Prince called TurboQuant "Google's DeepSeek." ExpandNASDAQ: MUMicron TechnologyToday's Change(-0.49%) $-1.82Current Price$366.03Key Data PointsMarket Cap$413BDay's Range$340.50 - $366.9052wk Range$61.54 - $471.34Volume2MAvg Vol41MGross Margin58.54%Dividend Yield0.14% In other words, investors shouldn't fear the impact of TurboQuant on long-term demand for memory chips. Google isn't the only company working to solve this challenge, and it's unlikely it'll stop trying to optimize for memory usage going forward. That said, there are reasons to be wary of Micron stock at its current share price, even after the recent pullback. The cyclical nature of the memory chip market can lead to significant drops in earnings, and Google's release certainly won't help. The surprise winner from Google's AI advancement Improving the memory efficiency of AI algorithms won't have much impact on the most advanced frontier models driving artificial intelligence forward. However, it could have a noticeable impact on models used on consumer devices like smartphones and laptops, which are much more constrained by their hardware. As such, Apple (AAPL +0.11%) could be a surprise winner from Google's TurboQuant. Apple has struggled to develop a large language model capable of handling significant tasks on the iPhone. The company values data privacy and security, so it wants to send as little user data as possible to a remote server. But that severely limits the AI capabilities it can include in the iPhone. That has resulted in multiple delays of the long-promised Siri update with new generative AI features. ExpandNASDAQ: AAPLAppleToday's Change(0.11%) $0.29Current Price$255.92Key Data PointsMarket Cap$3.8TDay's Range$250.65 - $256.1352wk Range$169.21 - $288.62Volume31MAvg Vol48MGross Margin47.33%Dividend Yield0.41% But the TurboQuant breakthrough could enable much more on-device AI processing, as memory has been a major bottleneck for Apple's devices. It's the reason older iPhone models haven't received basic Apple Intelligence features like AI-generated emojis in iMessage. Google could be the key to unlocking generative AI features for the iPhone. Apple has already announced a partnership with Google to use its Gemini frontier model for an updated Siri. It'll likely be able to get much more out of it by integrating Google's memory optimizations on its devices. That could spur a massive upgrade cycle for the iPhone. Nearly 1 billion iPhones in use at the end of 2025 are incapable of running Apple Intelligence, according to CLSA analysts. If new Siri features convince even a fraction of those users to upgrade earlier than normal, Apple could see a huge surge in iPhone sales this fall. Continued AI improvements driven by efficiencies unlocked by Google could drive more upgrades throughout 2027. Investors already have high expectations for Apple this year, with the stock trading for nearly 30 times forward earnings expectations. But more advanced AI capabilities on its devices could lead to significant upside for the stock.Read NextApr 2, 2026 •By James HiresTwo Blue Chip Stocks I'd Buy Into This Week's Weakness Without HesitationApr 2, 2026 •By James BrumleyApple's AI Strategy Is Pivoting. Here's Why That Could Be Great News for the Stock.Apr 2, 2026 •By Geoffrey SeilerCoca-Cola vs. Apple: Which Warren Buffett Favorite Belongs in Your Portfolio Forever?Apr 2, 2026 •By Neil PatelWhere Will Apple Stock Be in 5 Years?Apr 1, 2026 •By Lyle DalyThe Largest Companies by Market Cap in April 2026Apr 1, 2026 •By Matt DiLallo7 Best ETFs to Buy in April 2026About the AuthorAdam Levy is a contributing Motley Fool stock market analyst covering technology, consumer, and financial stocks and how policy, economic, and consumer trends shape personal finance, Social Security and retirement savings.

Before The Motley Fool, Adam was a financial advisor at Edward Jones. He studied finance and electrical engineering at Carnegie Mellon University.TMFnCaffeineX@admlvyStocks MentionedAppleNASDAQ: AAPL$255.92(+0.11%)+$0.29AlphabetNASDAQ: GOOGL$295.70(-0.57%)-$1.69Micron TechnologyNASDAQ: MU$366.03(-0.49%)-$1.82AlphabetNASDAQ: GOOG$294.46(-0.15%)-$0.44*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.