New York, January 6, 2026, 12:40 EST — Regular session
Microchip Technology Incorporated (MCHP) shares rose 10.2% to $73.93 in midday trading on Tuesday after the chipmaker lifted its fiscal third-quarter net sales outlook in a late-Monday update. The company now expects net sales of about $1.185 billion for the quarter ended Dec. 31, 2025, above its earlier $1.109 billion to $1.149 billion forecast, and said it would not hold a conference call on the update, with full results due Feb. 5. CEO Steve Sanghi said “our bookings activity was very strong in the December quarter,” referring to new orders, and the company pointed to a stronger March-quarter opening backlog, or unfilled orders, as it ramps factories to cut under-utilization charges, a cost of running plants below capacity. 1
The update is a fresh data point for investors tracking a chip “inventory correction,” a period when buyers run down excess stock and delay new orders. Microchip’s forecast lift sent the stock up 5.6% in after-hours trading on Monday, after the company pointed to improving demand as customers worked through chip stockpiles built during the pandemic. 2
Microchip is a broadline supplier of semiconductors to industrial and automotive customers, where demand can swing quickly with factory output and vehicle builds. Traders often watch bookings and backlog for early signs of a turn, since stronger order flow can lift factory use and improve margins as fixed costs get spread over more units. 3
An 8-K, a current report filed with U.S. regulators, was submitted on Jan. 5 and lists the business update under Item 2.02, the section used for operating results and financial condition. 4
Several brokers lifted targets on Tuesday. Needham analyst N. Quinn Bolton maintained a buy rating and raised his price target to $77 from $75, while Stifel’s Tore Svanberg lifted his target to $80 from $75, according to data compiled by Benzinga. 5
Still, the rally leaves less room for a stumble in end demand. If customers pause orders again or push out deliveries, Microchip could face renewed under-utilization costs and fresh charges tied to excess inventory.
