Gold bars to be exempt from tariffs, White House clarifies
Investing.com - Needham raised its price target on Microchip Technology (NASDAQ:MCHP), a semiconductor company with a $35.7 billion market cap, to $77.00 from $66.00 on Friday, while maintaining a Buy rating. According to InvestingPro data, the stock has shown strong momentum with a 29.6% return over the past six months.
The price target increase follows Microchip’s quarterly results and guidance that were largely in line with market expectations, reflecting an improving demand environment in the semiconductor sector. While currently trading at elevated EBIT and EBITDA multiples according to InvestingPro analysis, analysts expect the company to return to profitability this year.
Needham highlighted that a market recovery appears to be underway as bookings and backlog continue to rise, with July bookings reaching their highest level in three years. Lead times for certain products are increasing to 6-12 weeks, up from the previous 4-8 weeks.
The firm noted that inventory write-downs and underutilization charges are decreasing, though these expenses continue to affect Microchip’s non-GAAP gross margin. These charges had approximately a 1200 basis point impact on gross margin in the first quarter of fiscal year 2026.
Microchip’s CEO Steve Sanghi pointed to a "trifecta effect" on revenue growth as the business recovers from the cyclical bottom, contributing to Needham’s more optimistic outlook and higher price target.
In other recent news, Microchip Technology reported its first-quarter fiscal year 2026 earnings, surpassing expectations with an earnings per share (EPS) of $0.27, compared to the forecasted $0.24. The company also exceeded revenue projections, reporting $1.08 billion against an anticipated $1.05 billion. These results highlight a strong performance in the quarter. Additionally, Morgan Stanley (NYSE:MS) raised its price target for Microchip Technology from $61 to $63, maintaining an Equalweight rating on the stock. The firm noted that Microchip’s quarter-over-quarter revenue growth for the June quarter was the highest among its peers so far this earnings season. However, guidance for the September quarter was in line with expectations. These developments are part of the recent updates concerning Microchip Technology.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.