Microchip Technology Incorporated · MCHP · FY2026 Q2 · Calendar Q4 2025

Microchip pairs stronger demand with a margin-recovery plan

The quarter supports a cautiously constructive operating thesis: demand improved across data-center, MCU and analog markets, and Gen 6 Switchtec creates a potential growth avenue. The thesis still depends on converting that demand into better margins as inventory and fab-utilization charges recede.

Reported After market closeNASDAQTechnology $42.78B market cap
90quality score

Earnings scorecard

Reported versus consensus
Reported EPS $0.35 Consensus $0.33
EPS surprise +5.9% Reported versus consensus
Reported revenue $1.14B Consensus $1.13B
Revenue surprise +0.7% Reported versus consensus

Market reaction

event-close to next-session close
Stock move -5.2% Event window
SPY move +0.1% Same window
Abnormal move -5.3% Stock minus SPY
Volume 2.5× Versus trailing sessions
Subsequent drift +19.7% Up to 20 sessions
MCHPSPY benchmark

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Transcript intelligence

What changed

Microchip delivered sequential sales growth and introduced its 3-nm PCIe Gen 6 Switchtec, but reported margin pressure from inventory write-offs and underutilization. Management maintained guidance and pointed to future improvement from fab right-sizing and lower inventory.

Guidance delta

Guidance was maintained: December sales were indicated slightly lower sequentially, with non-GAAP margin of 57%-59%.

Key takeaways

  • Sequential sales growth was driven by data-center, MCU and analog demand.
  • The 3-nm PCIe Gen 6 Switchtec expands the AI and hyperscale opportunity.
  • Inventory write-offs and underutilization charges remain a near-term margin drag.

Management priorities

  • Ramp Fab 4 and Fab 5 while progressing the Fab 2 sale
  • Launch and ramp Gen 6 Switchtec production
  • Reduce inventory and underutilization to support margin recovery

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Earnings History

Estimate Beat Miss Match
MCHP REVENUE earnings history estimate and actual scatter chart 9 reported fiscal quarters and 3 future estimate-only quarters. Q3 '24 estimate $2B Q3 '24 actual $2B, miss Q4 '24 estimate $1B Q4 '24 actual $1B, miss Q1 '25 estimate $1B Q1 '25 actual $1B, match Q2 '25 estimate $1B Q2 '25 actual $1B, beat Q1 '26 estimate $1B Q1 '26 actual $1B, beat Q2 '26 estimate $1B Q2 '26 actual $1B, beat Q3 '26 estimate $1B Q3 '26 actual $1B, beat Q4 '26 estimate $1B Q4 '26 actual $1B, beat Q1 '27 estimate $1B Q1 '27 actual $1B, beat Q2 '27 estimate $2B Q3 '27 estimate $2B Q4 '27 estimate $2B
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Analyst Consensus ?

ConsensusBuy44 ratings
Bullish3068.2%
Neutral1431.8%
Bearish00.0%

Analyst 52W Price Targets

$77.77Current
$61Low
$95.1Average
$135High

Latest persisted target per named analyst; persisted current price from FN2's market snapshot as of Oct 1, 2026. Not an FN2 forecast.

Firm-level rating actions

FMP grade actions identify the grading firm, not a named analyst.

FirmRatingPrior ratingActionDate
BMO Capital Outperform OutperformMaintainAug 21, 2026
Cantor Fitzgerald Overweight OverweightMaintainAug 17, 2026
UBS Buy BuyMaintainAug 7, 2026
Truist Securities Hold HoldMaintainAug 7, 2026
Rosenblatt Buy BuyMaintainAug 7, 2026
Show 39 more rating actions

Named analyst price targets

Upside is calculated against the persisted current price $77.77. FMP does not supply a rating on these named-analyst rows.

FirmAnalyst52W targetPrice when postedUpsideDate
Truist FinancialAnalyst unavailable$90$84.81 +15.7%Aug 7, 2026
UBSAnalyst unavailable$120$74.36 +54.3%Aug 7, 2026
JefferiesAnalyst unavailable$100$74.36 +28.6%Aug 7, 2026
Wells FargoJoe Quatrochi$88$80.96 +13.2%Jul 20, 2026
BarclaysTom O'Malley$105$99.09 +35.0%May 11, 2026
See 74 more

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Company context

Snapshot as of publication

Microchip Technology Incorporated creates, produces, and sells intelligent, interconnected, and secure embedded control solutions to customers throughout the Americas, Europe, and Asia. The company's core offerings include a range of microcontrollers, such as general-purpose 8-bit, 16-bit, and 32-bit models, as well as 32-bit embedded microprocessors. These specialized microcontrollers are designed for numerous applications across industries like automotive, industrial, computing, communications, lighting, power supplies, motor control, human-machine interfaces, security, and various wired and wireless connectivity needs. Beyond its processors, Microchip provides development tools that enable system designers to program its microcontroller and microprocessor units for specific tasks. Its product lineup also features Field-Programmable Gate Arrays (FPGAs) and a broad selection of analog, interface, mixed-signal, and timing components.…

Historical context

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Sources

  1. Earnings call transcript and parsed analysis · 2026-05-11T10:29:34.698584+00:00
  2. FN2 earnings calendar · 2026-07-26T00:36:15.940040+00:00
  3. Polygon adjusted daily market bars · 2026-10-01T01:16:03.752094+00:00
  4. Financial Modeling Prep analyst price-target consensus and quote snapshot · 2026-10-01T01:16:03.748963+00:00

Methodology

Reported and consensus figures come from FN2's earnings event records. Market reaction and volume are calculated from daily adjusted bars around the event; abnormal move subtracts the SPY move over the same window.

Analyst target low, average, and high values are derived at request time from each named analyst's latest persisted FMP target. The current-price marker comes from FN2's persisted market snapshot. They are sell-side estimates, not an FN2 valuation or recommendation.

Transcript intelligence is a structured synthesis of the current and prior earnings-call analyses. Missing values stay missing and are never estimated.

By FN2 Research · Updated · As of 2026-10-01. For educational purposes only; not investment advice.