Micron Stock May Struggle to Break $1,000 Mark on Fed Hike Expectations and Apple Supply Chain Shift

TradingKey - Micron's stock price failed to breach the $1,000 mark and may face downward pressure to retest $800.

On July 27 Eastern Time, ChangXin Technology, the world's fourth-largest DRAM manufacturer, surged over 400% today in its market debut, boosting US memory-related stocks in pre-market trading. Among them, Micron Technology ( MU) rose 3.33% to temporarily trade at $951, recovering some lost ground. Micron stock chart, Source: TradingView

Last week, Tesla ( TSLA) and Google ( GOOG) released earnings reports showing that AI capital expenditures increased rather than decreased, boosting Micron's stock price rebound to 20%. The stock briefly breached the $1,000 mark intraday last Thursday (July 23) but failed to stabilize. The following day, Micron's stock tumbled nearly 7%, almost losing the $900 mark intraday, before finally closing down near $920.

Currently, Micron is under pressure from two major pieces of bearish news, making it unlikely for its stock price to break above the $1,000 milestone in the short term. From this Wednesday to Thursday, the Federal Reserve will announce its interest rate decision. According to CME data, there is a 33.7% probability that the Federal Reserve will hike rates in July, and a 66.3% chance of keeping current rates unchanged. It is worth noting that expectations of a rate hike or keeping high interest rates longer will push up US Treasury yields, which in turn compresses the discounted valuations of high-growth tech stocks, restrains consumers' non-essential spending, and slows down the replacement cycle for smartphones, PCs, and consumer electronics. This poses a potential risk to the demand for Micron's standard DRAM and NAND flash memory.

According to a report by The Wall Street Journal on July 24, impacted by skyrocketing global memory chip prices, Apple ( AAPL) CEO Tim Cook recently led a team to lobby the Trump administration, applying to use memory chips from ChangXin Memory Technologies (CXMT) and Yangtze Memory Technologies (YMTC) in iPhones, Macs, and other products sold overseas. If approved, Apple would directly reduce its procurement reliance on Micron, which is clearly unfavorable for its stock price growth.

In the short term, uncertainty regarding the interest rate outlook and news of supply chains shifting toward localization in China have caused Micron's stock price to face significant technical and psychological resistance near the $1,000 psychological level, and even experience volatile pullbacks to retest the $800 mark, or potentially drop to near $650, which was the pullback low during the upward move in May and possesses strong support.

Micron stock chart, Source: TradingView