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MCHP · Analysis updated Nov 6, 2026, 11:47 AM ET
Why is Microchip Technology Incorporated (MCHP) stock moving?
Microchip reported a clean fiscal Q2. Sales were $1.622B, up 42.2% year over year, and EPS was $0.97 against a $0.93-$0.94 consensus. Non-GAAP gross margin was 66.5%, and bookings were strong with book-to-bill well above one. The problem was the outlook. December-quarter revenue guidance (midpoint about $1.606B) and EPS guidance (midpoint $0.91) both fell below consensus. Management blamed about $53M of non-recurring September items, seasonality, and foundry and test supply constraints that stop it filling some orders. The stock fell 13.9% on Nov 5 to $64.85 on about 44M shares, roughly 4x the usual volume. It extended the drop on Nov 6 to about $57-60, according to reports. Analysts cut targets broadly (Wells Fargo to $70, Cantor to $100, Susquehanna to $100, B. Riley to $85) but mostly kept Buy ratings. The consensus target of about $94.62 is far above the price. Supportive points: the March-quarter backlog is described as stronger than December's, data center revenue topped $250M, free cash flow was $377M, and management cited a valuation of about 15x earnings. Risks: the timing of supply relief is unclear, there is no March guidance, a CEO warning about data-center froth, a sector-wide semiconductor selloff, and a high beta. The stock is near the lower part of its 52-week range ($48.52-$105.91).
News behind the analysis
- Microchip (MCHP) Q2 2027 Earnings Call TranscriptManagement guided the December quarter to revenue of $1.573B-$1.638B and EPS of $0.87-$0.95. It cited supply constraints and lengthening lead times.
- Microchip Technology (MCHP) Q2 Earnings and Revenues Top EstimatesQ2 EPS of $0.97 beat the $0.94 consensus, against $0.35 a year earlier. The company has beaten EPS estimates four quarters in a row.
- Microchip Technology Analysts Slash Their Forecasts After Q2 ResultsQ2 sales were $1.622B, above the $1.607B consensus, but Q3 guidance fell below estimates. Analysts including Rosenblatt, Cantor and Needham cut price targets while keeping Buy ratings.
- Microchip Q2 Earnings Call Highlights: Record Sales and 42% GrowthSales rose 42.2% year over year. Book-to-bill was well above one, but $53M of non-recurring September items weigh on the December outlook.
- Microchip Technology Q2 Earnings Call HighlightsSupply constraints at foundries and test suppliers kept the company from filling some orders. The March-quarter backlog is stronger than December's was at the same point, and data center revenue topped $250M.
- MCHP Q3 CY2026 deep dive: data center design wins offset by cautious outlook and supply constraintsAdjusted operating income of $639.9M beat estimates. Guidance for the next quarter came in about 1.4% below analyst estimates.
- Why is Microchip Technology stock sliding today?The stock fell about 10% in morning trading on weak Q3 guidance, supply limits, a CEO warning about data-center froth and a round of price-target cuts. The decline was company-specific, since the Nasdaq rose 1.5%.
- Microchip Technology stock drops 4% as Q3 guidance trails estimatesThe Q3 revenue midpoint of $1.606B was below the $1.62B consensus. Adjusted EPS guidance midpoint of $0.91 was below the $0.94 consensus. The quarterly dividend is 45.5 cents.
- Microchip Technology Shares Drop Over 8% as Target Prices LoweredThe stock closed at $59.63 on Nov 6, down 8.05%. Susquehanna, Barclays and B. Riley cut price targets.
- Microchip Technology Stock Price Target Lowered at Wells FargoWells Fargo cut its target from $80 to $70 and kept an equal weight rating. Shares traded around $57.50.