Microchip Raises Outlook Again, Stock Soars
Microchip Technology Incorporated (NASDAQ:MCHP) stock rose Tuesday after the semiconductor company disclosed that it now expects fiscal third-quarter revenue to come in above prior expectations.
Third-Quarter Guidance
On Monday, Microchip said it now expects third-quarter fiscal 2026 net sales of approximately $1.185 billion for the period ending December 31, 2025.
The revised outlook exceeds the company’s original guidance range of $1.109 billion to $1.149 billion issued on November 6, 2025, as well as a December 2 update that pointed to the high end of that range.
Also Read: Microchip Customers Still Holding Back On Chip Orders, Rebound Coming In 2026 Says Analyst
Last month, the company also raised its third-quarter adjusted earnings per share guidance to 40 cents, up from a prior range of 34 cents to 40 cents, bringing expectations in line with consensus estimates.
Management Commentary
Steve Sanghi, Microchip Technology’s CEO and president, said the company is seeing a broad-based recovery across most end markets as inventory corrections ease both in distribution channels and among direct customers, with new design wins beginning to move into production.
“We continue to experience a fairly broad-based recovery in most of our end markets driven by progress we have made in inventory correction in distribution as well as direct customers, and with new customer designs turning to production,” Sanghi said, adding that booking activity remained strong in the December quarter despite the holiday season.
He noted that the company entered the March quarter with a significantly stronger starting backlog than it had at the start of the December quarter.
Sanghi also highlighted progress on Microchip’s turnaround efforts, saying the company has advanced on most elements of its nine-point recovery plan and broader strategic initiatives. “We have made substantial progress on most elements of our nine-point recovery plan as well as our strategic initiatives,” he said.
He added that internal inventory levels have fallen meaningfully, which should help reduce inventory write-offs, while preparations are underway to ramp factory output in the March quarter, a move expected to lower under-utilization charges.
Microchip plans to release its fiscal third quarter 2026 financial results on February 5, 2026.
MCHP Price Action: Microchip Technology shares were up 4.31% at $69.95 during premarket trading on Tuesday, according to Benzinga Pro data.
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