Microchip Technology (NASDAQ:MCHP) Trading Up 12.8% After Strong Earnings

Microchip Technology Incorporated (NASDAQ:MCHP)’s share price traded up 12.8% on Friday after the company announced better than expected quarterly earnings. The stock traded as high as $83.99 and last traded at $83.8420. 4,132,227 shares were traded during mid-day trading, a decline of 61% from the average session volume of 10,525,443 shares. The stock had previously closed at $74.36.

The semiconductor company reported $0.76 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.70 by $0.06. Microchip Technology had a net margin of 4.88% and a return on equity of 10.87%. The business had revenue of $1.48 billion for the quarter, compared to analyst estimates of $1.46 billion. During the same quarter last year, the firm earned $0.27 EPS. The company’s revenue was up 38.0% on a year-over-year basis. Microchip Technology has set its Q2 2027 guidance at 0.910-0.950 EPS.

Microchip Technology Announces Dividend

The firm also recently declared a quarterly dividend, which will be paid on Wednesday, September 9th. Shareholders of record on Monday, August 24th will be given a dividend of $0.455 per share. The ex-dividend date of this dividend is Monday, August 24th. This represents a $1.82 dividend on an annualized basis and a yield of 2.2%. Microchip Technology’s dividend payout ratio is presently 866.67%.

Key Stories Impacting Microchip Technology

Here are the key news stories impacting Microchip Technology this week:

• Positive Sentiment: Microchip reported fiscal Q1 earnings of $0.76 per share, exceeding the $0.70 consensus estimate. Revenue rose 38% year over year to $1.48 billion, also surpassing expectations of $1.46 billion. Microchip Technology quarterly earnings report
• Positive Sentiment: Management forecast fiscal Q2 2027 adjusted EPS of $0.91-$0.95, well above the $0.76 analyst consensus, and revenue of approximately $1.6 billion versus expectations of about $1.5 billion. The upbeat outlook reflects strengthening chip demand, including from AI data centers. Microchip forecasts upbeat quarterly revenue
• Positive Sentiment: Rosenblatt Securities reaffirmed its “buy” rating and maintained a $120 price target, implying substantial potential upside from recent trading levels. Rosenblatt rating update
• Positive Sentiment: A partnership with Micron combining PCIe Gen 6 switches and SSDs could expand Microchip’s presence in AI data-center infrastructure and improve its competitive position against Broadcom and Astera Labs. Microchip and Micron alliance
• Neutral Sentiment: Microchip declared a quarterly dividend of $0.455 per share, representing an annualized yield of approximately 2.4% and maintaining shareholder returns.
• Negative Sentiment: Truist Financial lowered its price target from $105 to $90 and moved to a “hold” rating, signaling caution about valuation or the extent of the near-term recovery. Truist price target update

Wall Street Analyst Weigh In

A number of brokerages recently commented on MCHP. Weiss Ratings downgraded Microchip Technology from a “hold (c)” rating to a “hold (c-)” rating in a report on Friday, July 24th. Zacks Research upgraded shares of Microchip Technology from a “hold” rating to a “strong-buy” rating in a report on Tuesday, May 12th. Wall Street Zen raised shares of Microchip Technology from a “hold” rating to a “buy” rating in a research note on Saturday, May 9th. TD Cowen reduced their price target on shares of Microchip Technology from $105.00 to $90.00 and set a “hold” rating on the stock in a research report on Monday, July 13th. Finally, Susquehanna increased their price target on shares of Microchip Technology from $95.00 to $120.00 and gave the stock a “positive” rating in a research note on Friday, May 8th. Four research analysts have rated the stock with a Strong Buy rating, thirteen have assigned a Buy rating and seven have issued a Hold rating to the company’s stock. Based on data from MarketBeat.com, the company has a consensus rating of “Moderate Buy” and an average target price of $99.05.

Insider Activity at Microchip Technology

In other Microchip Technology news, Director Matthew W. Chapman sold 10,000 shares of Microchip Technology stock in a transaction on Friday, May 15th. The stock was sold at an average price of $95.48, for a total transaction of $954,800.00. Following the completion of the transaction, the director owned 20,665 shares in the company, valued at approximately $1,973,094.20. The trade was a 32.61% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, COO Richard J. Simoncic sold 5,000 shares of the stock in a transaction on Friday, May 22nd. The stock was sold at an average price of $93.44, for a total value of $467,200.00. Following the completion of the sale, the chief operating officer directly owned 135,508 shares in the company, valued at approximately $12,661,867.52. This represents a 3.56% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 26,750 shares of company stock valued at $2,543,170 in the last 90 days. Corporate insiders own 1.79% of the company’s stock.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently made changes to their positions in the company. EFG International AG bought a new stake in shares of Microchip Technology during the fourth quarter valued at approximately $29,000. Miller Capital Partners Inc. bought a new position in Microchip Technology in the 4th quarter valued at approximately $29,000. Continuum Advisory LLC purchased a new stake in Microchip Technology during the 2nd quarter valued at $30,000. Reflection Asset Management bought a new stake in shares of Microchip Technology in the 4th quarter worth $33,000. Finally, Garton & Associates Financial Advisors LLC purchased a new position in shares of Microchip Technology in the fourth quarter worth $33,000. Institutional investors own 91.51% of the company’s stock.

Microchip Technology Stock Up 12.7%

The stock has a market cap of $45.49 billion, a PE ratio of 398.05, a PEG ratio of 0.78 and a beta of 1.76. The company has a debt-to-equity ratio of 0.85, a current ratio of 2.09 and a quick ratio of 1.18. The company has a 50 day moving average price of $87.34 and a two-hundred day moving average price of $81.28.

About Microchip Technology

Microchip Technology Inc is a semiconductor company headquartered in Chandler, Arizona, that designs, develops and supplies a broad portfolio of embedded control and analog semiconductors. Its product lineup centers on microcontrollers (including the well-known PIC family), digital signal controllers and associated development tools and software, along with a range of mixed-signal and analog devices, nonvolatile memory, power management, timing, interface, wireless and security products. The company also provides integrated hardware and software solutions intended to simplify embedded design and accelerate time to market for OEMs and contract manufacturers.

Microchip’s products are used across a wide range of end markets, including automotive, industrial automation, consumer electronics, communications, aerospace and defense, and Internet of Things (IoT) applications.