What Happened?
Shares of analog chipmaker Microchip Technology (NASDAQ: MCHP) fell 2.2% in the afternoon session after a broader market downturn and specific weakness in the semiconductor industry overshadowed positive analyst ratings.
The decline occurred as major U.S. stock indexes fell following the release of a jobs report that showed a higher unemployment rate than expected, failing to boost hopes for interest-rate cuts. The tech-heavy Nasdaq fell, and semiconductor stocks, in particular, faced pressure, with the Philadelphia Semiconductor Index dropping 1.1%. The negative market sentiment proved too strong for company-specific positive news to overcome. Notably, Cantor Fitzgerald upgraded Microchip Technology's stock from "Neutral" to "Overweight" and significantly raised its price target, an action that would typically support a stock's price.
The shares closed the day at $65.88, down 1.9% from previous close.
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What Is The Market Telling Us
Microchip Technology’s shares are very volatile and have had 23 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 13 days ago when the stock gained 11% on the news that the company raised its financial guidance for its third fiscal quarter, citing stronger-than-expected business performance, bookings, and backlog.
Microchip now expected its net sales and earnings per share to be at the high end of its previously provided range. This revised outlook represented an approximate 12% year-over-year growth in revenue. The company also anticipated non-GAAP earnings per share to be about $0.40, surpassing prior estimates. The CEO stated that business was performing better than expected with booking activity remaining strong. In addition to the upgraded forecast, the company also announced the launch of new energy-efficient power monitors designed to reduce power consumption by 50% in portable devices.
Microchip Technology is up 15.8% since the beginning of the year, but at $65.88 per share, it is still trading 12.5% below its 52-week high of $75.26 from July 2025. Investors who bought $1,000 worth of Microchip Technology’s shares 5 years ago would now be looking at an investment worth $949.14.
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