New York, January 6, 2026, 13:34 ET — Regular session
Microchip Technology (MCHP.O) shares climbed nearly 10% on Tuesday after the chipmaker lifted its fiscal third-quarter sales forecast, extending gains sparked by the update a day earlier. The stock was up 10.0% at $73.75 in early afternoon trading, after a 5.6% rise in after-hours trading on Monday. 1
The pre-announcement is an early check on demand for embedded chips used in everything from factory gear to cars, where investors have tracked an “inventory correction” — customers working down excess stock instead of placing new orders.
That matters because order momentum and factory utilization often drive profit swings in this part of the chip market. When plants run below capacity, under-utilization charges can squeeze margins, and excess inventory can trigger write-offs.
Microchip disclosed the update in an 8-K filing, furnishing a business update for the quarter ended Dec. 31, 2025. The filing attached the company’s release under Item 2.02, which covers results of operations and financial condition. 2
The Chandler, Arizona-based company said it now expects net sales of about $1.185 billion for its fiscal third quarter, above its prior outlook of $1.109 billion to $1.149 billion. Chief Executive Steve Sanghi said, “Our bookings activity was very strong in the December quarter,” and added, “We have seen a substantial reduction in our internal inventory.” 3
Microchip’s rally lifted other chipmakers tied to industrial and automotive demand. Texas Instruments rose 8.1% and NXP Semiconductors gained 7.7%, while Qualcomm and ON Semiconductor were up about 3.8% and 3.9%, respectively.
Brokerage commentary also turned more upbeat. Needham analyst N. Quinn Bolton kept a buy rating and raised his price target to $77, while Citi reaffirmed a buy rating with an $80 target, Barron’s reported. 4
But the company’s release flagged a long list of ways the rebound could stumble, including demand swings, customer order pushouts or cancellations, pricing pressure and changes in factory utilization. It also warned that managing inventory levels remains a key variable in quarterly results. 5
Investors now turn to Microchip’s Feb. 5 earnings report for details on margins and guidance for the March quarter, after Tuesday’s jump repriced near-term expectations. 6
