Microchip Beats Q2 Estimates but Shares Sink 5% on Tepid Outlook

Aug 8 - Microchip Technology MCHP shares fell about 5% in Friday trading despite second-quarter fiscal 2026 results that exceeded analyst forecasts, as some investors viewed the outlook as underwhelming, according to a Friday press release.

The Arizona-based chipmaker reported non-GAAP earnings per share of $0.27, topping estimates by $0.03, while revenue rose to $1.08 billion, beating projections by $20 million. Gross margin improvements and stronger-than-seasonal revenue guidance were noted, but analysts flagged that elevated expectations may have tempered investor reaction.

Citi, KeyBanc, and Stifel maintained Buy or Overweight ratings, citing easing inventory headwinds, stronger backlogs for the September quarter, and progress on Microchip's Nine Point Recovery Plan. Stifel raised its 2026 EPS forecast to $1.47 from $1.35 and revenue to $4.6 billion from $4.56 billion.