Microchip Technology Faces Market Challenges Amidst Declining Shares

Microchip Technology Incorporated (MCHP), based in Chandler, Arizona, boasts a market cap of $28.7 billion. It is a prominent provider of smart, connected, and secure embedded control solutions across various global markets, including the Americas, Europe, and Asia. The company focuses on developing and manufacturing products such as microcontrollers, analog and interface solutions, and memory systems intended for embedded applications.

As a company exceeding $10 billion in valuation, Microchip Technology is categorized under “large-cap” stocks. Its extensive product lineup features 8-bit, 16-bit, and 32-bit microcontrollers, mixed-signal processors, field-programmable gate arrays (FPGAs), and various power management solutions. The firm caters to industries such as automotive, industrial, computing, and communications.

Despite a challenging market environment, MCHP has seen a 47% drop from its 52-week high of $100.57. In the last three months, its shares have decreased by 13.4%. This decline is notably less than the SPDR S&P Semiconductor ETF (XSD), which fell by 18.6% during the same period.

Looking at the broader picture, MCHP shares have decreased by 7.1% year-to-date, which is better than XSD’s 14.8% decline. However, over the past 52 weeks, Microchip Technology’s stock has slipped by 41.2%, underperforming XSD’s 8.6% drop.

Recently, MCHP has traded below both its 50-day and 200-day moving averages, indicating a bearish market trend. The selling pressure continued following its Q3 2025 earnings report, released on February 6, where the company’s stock fell 2.3%. In this report, Microchip Technology disclosed an adjusted EPS of $0.20, which missed analysts’ expectations and marked an 81.5% decline year-over-year. Revenue for the quarter stood at $1 billion, down 42% year-over-year. The gross margin contracted by 830 basis points to 55.4%, while the operating margin decreased to 20.5%. The company’s guidance for Q4 2025 also disappointed, with expected revenue ranging from $920 million to $1 billion and adjusted EPS between $0.05 and $0.15.

In contrast, rival NVIDIA Corporation (NVDA) has fared better, gaining 27.9% over the past year, despite a year-to-date decline of 18.3%, which is steeper than MCHP’s drop.

Despite the current challenges faced by MCHP, analysts express a moderate level of optimism regarding the stock’s future trajectory. The stock currently holds a consensus rating of “Moderate Buy” from the 22 analysts monitoring it, and it trades below the average price target of $67.05.

On the date of publication,
Sohini Mondal
did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy
here.

More news from Barchart

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.