Micron Technology Faces Significant Challenges Amid Surcharge Announcement MU is enduring a tough month, with its stock plummeting over 22% in the last five trading days.
As investors were hoping for some relief, Reuters reported that Micron is implementing a tariff-related surcharge on certain products, starting April 9.
Impact of Tariffs on Micron’s Business
Micron manufactures a large portion of its products in Asia, including locations such as China, Taiwan, Malaysia, Japan, and Singapore. The company has informed its U.S. customers that it will transfer costs from the most recent tariffs announced by President Donald Trump. Although semiconductors were not included in these tariffs, memory modules and solid-state drives, which are vital for laptops, data centers, and various tech infrastructures, will be affected.
According to Reuters, Micron communicated this surcharge through a letter, underlining that customers will now bear these additional costs. This announcement follows discussions from its March 21 earnings call, where executives indicated their intention to pass on tariff-related expenses. This also coincides with a previously announced price increase due to unexpected demand pressures.
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Technical Analysis of Micron Stock
Chart created using Benzinga Pro
The timing of this announcement worsens Micron’s already precarious technical situation. Currently, Micron’s stock trades at $71.25 and is below all major moving averages. It lies significantly below the eight-day moving average of $78.92, the 50-day average at $92.40, and the 200-day average of $101.24, indicating a bearish market sentiment. Additionally, the Moving Average Convergence Divergence (MACD) is in the negative territory at -6.29, while the Relative Strength Index (RSI) hovers around 33.35, nearing oversold levels.
Uncertainty for Micron Shareholders
With the stock exhibiting a downward trend and economic concerns looming, investors are left in a cautious state. Micron’s direct approach—urging customers to either absorb the additional costs or risk shortages—could maintain profit margins in the short term but introduces further uncertainty for investors dealing with a stock already in a downward spiral.
If there is potential for recovery, it does not appear to be on the immediate horizon.
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