Microchip Technology (NASDAQ:MCHP) Issues Earnings Results

Microchip Technology (NASDAQ:MCHP) posted its earnings results on Thursday. The semiconductor company reported $0.76 EPS for the quarter, topping the consensus estimate of $0.70 by $0.06, FiscalAI reports. Microchip Technology had a net margin of 4.88% and a return on equity of 10.87%. The company had revenue of $1.48 billion during the quarter, compared to the consensus estimate of $1.46 billion. During the same period in the previous year, the firm posted $0.27 earnings per share. The company’s revenue for the quarter was up 38.0% compared to the same quarter last year. Microchip Technology updated its Q2 2027 guidance to 0.910-0.950 EPS.

Here are the key takeaways from Microchip Technology’s conference call:

• Strong June-quarter results: Net sales rose 13.2% sequentially and 38% year over year to $1.485 billion, while non-GAAP EPS of $0.76 exceeded the guidance midpoint by $0.07.
• September-quarter outlook is robust, with revenue expected to increase 8% sequentially to approximately $1.60 billion and non-GAAP EPS guided to $0.91–$0.95. Bookings were the strongest in roughly four years, with a book-to-bill ratio well above one.
• Data-center revenue is projected to grow from approximately $591 million in calendar 2025 to about $1 billion in 2026, supported by broad exposure across power, memory, security, timing, networking, and PCIe products. Management cited 14 PCIe Gen 6 design wins and expects further growth as designs enter production in 2027.
• Management believes the distribution inventory correction is complete, with distributor inventory at a historically low 25 days and sell-through up 17% sequentially. Aerospace and defense demand is also accelerating, with potential for substantial multi-year growth as missile, drone, radar, and other defense programs ramp.
• Gross margin is expected to peak near 66.5% in September, aided by favorable product mix, licensing revenue, pricing, and lower underutilization charges, but management cautioned that several benefits are one-time or lumpy. Foundry, substrate, OSAT, and test-capacity constraints are also lengthening lead times, while the company plans to prioritize debt repayment over buybacks or dividend increases.

Microchip Technology Stock Performance

MCHP traded up $10.33 during trading on Friday, hitting $84.69. The stock had a trading volume of 19,076,536 shares, compared to its average volume of 11,116,998. The firm has a market cap of $45.99 billion, a PE ratio of 403.30, a P/E/G ratio of 0.75 and a beta of 1.76. Microchip Technology has a 12 month low of $48.52 and a 12 month high of $105.91. The company has a current ratio of 2.09, a quick ratio of 1.18 and a debt-to-equity ratio of 0.85. The company has a 50 day simple moving average of $87.14 and a 200-day simple moving average of $81.30.

Microchip Technology Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Wednesday, September 9th. Investors of record on Monday, August 24th will be paid a $0.455 dividend. The ex-dividend date is Monday, August 24th. This represents a $1.82 dividend on an annualized basis and a yield of 2.1%. Microchip Technology’s dividend payout ratio (DPR) is presently 866.67%.

Insider Buying and Selling at Microchip Technology

In other Microchip Technology news, Director Matthew W. Chapman sold 3,000 shares of the company’s stock in a transaction dated Thursday, May 28th. The shares were sold at an average price of $97.52, for a total transaction of $292,560.00. Following the completion of the sale, the director directly owned 17,665 shares in the company, valued at $1,722,690.80. This represents a 14.52% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, COO Richard J. Simoncic sold 5,000 shares of the firm’s stock in a transaction dated Thursday, June 4th. The shares were sold at an average price of $97.52, for a total value of $487,600.00. Following the completion of the sale, the chief operating officer directly owned 130,508 shares in the company, valued at approximately $12,727,140.16. This represents a 3.69% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold 26,750 shares of company stock worth $2,543,170 over the last ninety days. Company insiders own 1.79% of the company’s stock.

Institutional Trading of Microchip Technology

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in MCHP. State Street Corp lifted its holdings in shares of Microchip Technology by 2.8% during the fourth quarter. State Street Corp now owns 28,863,048 shares of the semiconductor company’s stock worth $1,839,153,000 after buying an additional 783,157 shares during the last quarter. Boston Partners grew its stake in shares of Microchip Technology by 9.5% in the third quarter. Boston Partners now owns 16,234,332 shares of the semiconductor company’s stock worth $1,044,024,000 after acquiring an additional 1,406,885 shares during the last quarter. Invesco Ltd. increased its position in Microchip Technology by 4.8% during the fourth quarter. Invesco Ltd. now owns 14,992,128 shares of the semiconductor company’s stock worth $955,298,000 after acquiring an additional 684,561 shares during the period. FIL Ltd increased its position in Microchip Technology by 7.2% during the fourth quarter. FIL Ltd now owns 10,445,721 shares of the semiconductor company’s stock worth $665,601,000 after acquiring an additional 699,450 shares during the period. Finally, Rafferty Asset Management LLC raised its stake in Microchip Technology by 41.0% during the 2nd quarter. Rafferty Asset Management LLC now owns 6,203,762 shares of the semiconductor company’s stock valued at $436,559,000 after purchasing an additional 1,803,945 shares during the last quarter. Institutional investors and hedge funds own 91.51% of the company’s stock.

Analysts Set New Price Targets

MCHP has been the subject of several analyst reports. Wall Street Zen raised shares of Microchip Technology from a “hold” rating to a “buy” rating in a research note on Saturday, May 9th. Wells Fargo & Company lowered their target price on shares of Microchip Technology from $95.00 to $88.00 and set an “equal weight” rating on the stock in a research report on Monday, July 20th. Weiss Ratings lowered Microchip Technology from a “hold (c)” rating to a “hold (c-)” rating in a report on Friday, July 24th. Barclays boosted their price target on Microchip Technology from $80.00 to $105.00 and gave the stock an “equal weight” rating in a research report on Monday, May 11th. Finally, Citigroup decreased their price target on Microchip Technology from $113.00 to $95.00 and set a “buy” rating for the company in a research note on Friday. Three analysts have rated the stock with a Strong Buy rating, thirteen have assigned a Buy rating and seven have assigned a Hold rating to the company. Based on data from MarketBeat.com, the stock presently has a consensus rating of “Moderate Buy” and an average target price of $98.85.

Microchip Technology News Summary

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

• Positive Sentiment: Quarterly results exceeded expectations. Microchip reported fiscal Q1 2027 earnings of $0.76 per share, above the $0.70 consensus estimate, while revenue rose 38% year over year to $1.48 billion, topping expectations of $1.46 billion. Management cited demand recovery, inventory normalization, higher factory utilization and improved cash flow. MCHP Q1 Earnings Beat Estimates, Revenues Rise on Demand Recovery
• Positive Sentiment: Forward guidance was well above Wall Street forecasts. Microchip projected fiscal Q2 EPS of $0.91-$0.95 and revenue of approximately $1.6 billion, versus consensus estimates of $0.76 EPS and $1.5 billion in revenue. The outlook reflects strengthening demand for chips used in AI data centers, industrial, automotive and aerospace applications. Microchip Tech forecasts upbeat quarterly revenue on strong demand
• Positive Sentiment: Analysts see potential for a longer growth cycle. Commentary highlighted data-center-related revenue and AI infrastructure demand as possible drivers of sustained growth. Rosenblatt reaffirmed its “buy” rating and maintained a $120 price target. Microchip’s data center-related revenue likely drives longer up-cycle
• Neutral Sentiment: Microchip declared a quarterly dividend of $0.455 per share, payable September 9 to shareholders of record August 24. The dividend provides income support and represents an annualized yield of roughly 2.2%.
• Negative Sentiment: Truist lowered its price target to $90 from $105 and retained a “hold” rating. The revision suggests some caution about how much of the recovery is already reflected in MCHP’s valuation, despite the improved outlook. Truist price-target update

Microchip Technology Company Profile

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.