Microchip Technology (MCHP) Is Up 6.7% After Raising Q3 FY26 Outlook And Launching New AI‑Focused Chips

• Earlier this month, Microchip Technology raised its third-quarter fiscal 2026 guidance to the high end of prior ranges, now expecting roughly 1% sequential net sales growth and projecting GAAP earnings per share of about US$0.02, while also announcing new ultra‑low‑power PAC1711 and PAC1811 digital power monitors aimed at computing, networking, AI/ML and e‑mobility systems.
• This combination of stronger‑than‑expected near‑term guidance and new energy‑efficient power monitoring products highlights how Microchip is trying to align its portfolio with growing demand in AI infrastructure and electrification markets.
• We’ll now examine how Microchip’s raised quarterly guidance, underpinned by stronger bookings, affects the existing investment narrative and risk balance.

Trump has pledged to "unleash" American oil and gas and these 22 US stocks have developments that are poised to benefit.

Microchip Technology Investment Narrative Recap

To own Microchip, you need to believe its microcontroller and analog franchises can return to sustainable, profitable growth despite recent losses, high leverage and intense competition in higher end 32 bit solutions. The raised third quarter fiscal 2026 guidance, driven by firmer bookings and a swing to slight sequential sales growth, modestly supports the near term earnings recovery catalyst but does not remove the key risks around margins, debt servicing and inventory normalization.

The launch of the PAC1711 and PAC1811 ultra low power digital power monitors is most relevant here, because it ties directly into Microchip’s push to participate in AI infrastructure and e mobility demand while defending share against rivals moving up the performance curve. If these kinds of products gain traction, they could help address concerns about slower growth once channel inventories normalize, although execution and competitive pressure remain central questions.

Yet while guidance has improved, investors should be aware of how Microchip’s elevated debt load could still constrain...

Read the full narrative on Microchip Technology (it's free!)

Microchip Technology's narrative projects $6.6 billion revenue and $1.4 billion earnings by 2028.

Uncover how Microchip Technology's forecasts yield a $73.92 fair value, a 9% upside to its current price.

Exploring Other Perspectives

Six fair value estimates from the Simply Wall St Community span roughly US$22 to US$90 per share, showing how far apart individual views can be. When you set those opinions against Microchip’s reliance on a gradual earnings recovery from today’s unprofitable base, it underlines why checking several perspectives on the company’s potential and risks really matters.

Explore 6 other fair value estimates on Microchip Technology - why the stock might be worth as much as 33% more than the current price!

Build Your Own Microchip Technology Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Microchip Technology research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.
• Our free Microchip Technology research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Microchip Technology's overall financial health at a glance.

Curious About Other Options?

Our top stock finds are flying under the radar-for now. Get in early:

• Uncover the next big thing with financially sound penny stocks that balance risk and reward.
• The end of cancer? These 29 emerging AI stocks are developing tech that will allow early identification of life changing diseases like cancer and Alzheimer's.
• AI is about to change healthcare. These 30 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com