New York, Jan 6, 2026, 08:18 EST — Premarket
- Microchip shares rose about 4% in premarket trading after the chipmaker lifted its quarterly sales outlook.
- Microchip said it expects fiscal Q3 net sales of about $1.185 billion, above its prior $1.109 billion–$1.149 billion range.
Microchip Technology (MCHP) shares rose 4.1% to $69.82 in premarket trading on Tuesday, after the chipmaker lifted its quarterly sales outlook. The stock ended Monday at $67.06.
Microchip late on Monday raised its expected fiscal third-quarter net sales to about $1.19 billion, topping its prior forecast range of $1.11 billion to $1.15 billion. The update followed signs of recovery across end markets as customers worked through excess chip stockpiles built during the pandemic, Reuters reported.
Chief executive Steve Sanghi said bookings were “very strong” in the December quarter and that the March-quarter starting backlog — unfilled orders on hand — began the period stronger than the prior quarter. In an SEC filing, the company also flagged lower inventory write-offs and reduced under-utilization charges — costs tied to running factories below capacity — as it prepares to ramp output. SEC
The stock climbed 3.12% in Monday’s regular session, notching a second straight gain, and closed at $67.06. The shares are still about 13% below a 52-week high of $77.20, while volume on Monday ran above its 50-day average, MarketWatch data showed.
Analysts moved quickly to mark up their models. JPMorgan raised its price target on Microchip to $85 from $77 and kept an Overweight rating, pointing to the stronger backlog and a path to higher gross margin as factory utilization improves.
Microchip sells microcontrollers and analog chips used in cars, factories and consumer electronics, competing with firms such as Texas Instruments and NXP Semiconductors. For investors, the sales update is another datapoint in a wider debate over whether the industrial and automotive chip downturn is finally easing.
But the rebound case still hinges on follow-through. If customers slow orders again or push out deliveries, backlog can fade quickly, and a factory ramp risks leaving costs elevated if volumes disappoint.
