- Microchip Technology (MCHP) shares rose 11% to $54.52, hitting an intraday high of $58.06, after forecasting fiscal first-quarter 2026 revenue of $1.02 billion to $1.07 billion and adjusted EPS of 18 to 26 cents, surpassing analyst expectations despite a 40% stock decline over the past year.
- Fourth-quarter 2025 sales fell 27% to $970.5 million, but the milder-than-expected drop prompted CEO Steve Sanghi to call it the “bottom” of the industry cycle, with analysts from Jefferies ($70 target), Citi ($55), and Bank of America ($56) raising price targets and Piper Sandler upgrading to “Buy.”
- Truist Securities maintained a “Hold” rating with a $52 target, citing uncompelling valuation, while Microchip’s diversified chip portfolio positions it for recovery in automotive and industrial sectors as market conditions improve.
Microchip Technology (MCHP) shares climbed 11% to $54.52 in midday trading on Friday, hitting an intraday high of $58.06, as the chipmaker’s upbeat fiscal 1Q/26 forecast and analyst price target upgrades fueled investor optimism, despite a 40% stock value decline over the past 12 months. The company projected first-quarter revenue of $1.02 billion to $1.07 billion and adjusted earnings per share of $0.18 to $0.26, surpassing Wall Street expectations and signaling a potential rebound from a prolonged industry downturn. While 4Q/25 sales dropped 27% year-over-year to $970.5 million, the decline was milder than anticipated, prompting CEO Steve Sanghi to declare the period as “the bottom of this prolonged industry down cycle for Microchip.”
Analyst sentiment largely supported Microchip’s recovery outlook, with Jefferies maintaining a “Buy” rating and a $70 price target, citing the potential for a “sharp snap back” in the coming quarters. Citi (C) raised its target to $55 from $50, noting that Microchip could experience the “strongest bounce in fundamentals” when the economy recovers, while Bank of America Corporation (BAC) upgraded the stock to “Neutral” from “Underperform,” lifting its target to $56 from $44. Piper Sandler also upgraded Microchip to a “Buy” from “Hold,” driven by expected demand from distributors, with analysts stating the company “could see substantial recovery and growth in a short period of time.” However, Truist Securities remained cautious, maintaining a “Hold” rating and modestly increasing its price target to $52 from $43, arguing that the stock’s current valuation lacks appeal despite signs of a bottom.
Microchip’s performance reflects broader trends in the semiconductor industry, where inventory corrections and cyclical demand have pressured revenues, yet its diversified portfolio in microcontrollers and analog chips positions it for a potential upswing as markets stabilize. The company’s ability to outperform revenue expectations in a challenging quarter, coupled with a forward-looking guidance that exceeds projections, has bolstered confidence in its operational resilience. While the 40% annual stock decline underscores the sector’s volatility, Friday’s rally and analyst upgrades suggest Microchip (MCHP) may be poised to capitalize on improving industry conditions, particularly in automotive and industrial applications where its products are widely used. The mixed analyst outlook, with Truist’s caution contrasting more bullish views, highlights the uncertainty still facing the sector, but Microchip’s strategic positioning offers a compelling case for recovery.
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