New York, February 1, 2026, 19:06 (EST) — The market has closed.
- Microchip shares ended Friday’s session down 4.4%, finishing at $75.92 amid a broader slump in U.S. stocks.
- Attention turns to the company’s fiscal Q3 results and outlook, set for release later this week.
- Investors are closely monitoring any updates on demand recovery, bookings, and factory utilization.
Microchip Technology shares closed Friday down 4.4% at $75.92, hovering near the session’s low as the new week begins. The stock swung between $75.12 and $78.95, with roughly 12.5 million shares traded.
The slide matters as Microchip prepares to report its fiscal third-quarter results and provide guidance for the March quarter. Following a volatile January, traders want a clearer sense of demand trends in end markets that can turn cold fast.
Microchip is caught between industrial and automotive spending, where order flows hinge on credit conditions and confidence. A slight change in wording about demand or pricing can overshadow a quarter that otherwise appears “fine” on paper.
Friday’s mood dragged stocks down. Wall Street’s key indexes ended lower as investors digested Donald Trump’s choice of Kevin Warsh to replace Jerome Powell at the Federal Reserve, alongside earnings and inflation reports. “Markets are calibrating” to the appointment, said Michael Hans of Citizens Wealth. Angelo Kourkafas at Edward Jones pointed to a combination of policy worries and “mixed tech earnings.” (Reuters)
Chip stocks took a hit Friday, with NXP Semiconductors slipping 3.15% and ON Semiconductor down 3.71%. (MarketWatch)
Microchip’s most recent update came in early January, when it projected net sales for the quarter ending Dec. 31 at roughly $1.185 billion, beating earlier forecasts. CEO Steve Sanghi described bookings as “very strong” and noted the backlog entering the March quarter was better than in December. The company also highlighted efforts to cut internal inventory and ramp up factory output in the March quarter to reduce under-utilization costs. (SEC)
Investors will be watching one key thing: how much of that backlog actually turns into shipments. Plus, whether new orders continue growing without pushing prices down further. If demand remains uneven in industrial and automotive sectors, expect the stock to stay volatile.
There’s a margin angle to consider. While a factory ramp boosts utilization, it can backfire if volume doesn’t pick up, leaving costs spread across too few chips.
But the recovery isn’t guaranteed. If customers hold off on reducing inventories or if broader economic concerns cause buyers to postpone projects, Microchip could see weaker demand in the March quarter and fresh margin challenges.
Look ahead to the earnings report and conference call set for Feb. 5 at 5:00 p.m. EST. (Microchip)
