Microchip Technology Inc. (MCHP) is having a pretty good moment. The semiconductor company just raised its guidance for the third quarter of fiscal 2026, and here's the kicker: it's the second time they've bumped up their December quarter sales outlook. That kind of repeat performance caught JPMorgan's attention in a meaningful way.
The Analyst Take
JPMorgan analyst Harlan Sur maintained his Overweight rating on Microchip Technology but raised his price target from $77 to $85. That's an $8 increase, which doesn't happen without good reason.
What's Driving the Optimism
The company's revised quarterly sales guidance now sits at $1.185 billion, which translates to roughly 4% sequential growth and a solid 15% year-over-year increase, according to Sur's analysis. And this comes after Microchip already tweaked the guidance upward in early December.
"Bookings have been strong and the starting backlog for the March quarter is much stronger than it was for the December quarter," Sur noted in his research.
The analyst believes Microchip could keep posting sequential growth throughout 2026. There's also the margin story: gross margins are likely to expand thanks to lower underutilization charges and reduced inventory write-offs, which is exactly what investors want to hear when a company is hitting its stride.
MCHP Price Action: Shares of Microchip Technology climbed 8.37% to $72.67 at the time of publication on Tuesday.
