Microchip Technology stock drops 4% as Q3 guidance trails estimates

Monolithic Power Systems (MPWR) reported Q3 revenue of $1.20B, up 63.1% YoY, exceeding estimates by 3.4%. The company raised guidance and saw a 14.7% stock increase. Impinj (PI) reported $112.1M revenue, up 16.7% YoY, but its stock fell 3.5%. Microchip Technology (MCHP) reported $1.62B revenue, up 42.2% YoY, but missed guidance, causing a 6% stock decline. NXP Semiconductors (NXPI) reported $3.79B revenue, up 19.3% YoY, and Power Integrations (POWI) reported $125.5M revenue, up 5.5% YoY.

Axon Enterprise (AXON) fell 18.18% to $313, a 52-week low, after reporting earnings and increasing its stake in Skydio. Investors reacted negatively to the investment and guidance. Microchip Technology (MCHP) dropped 10%, with earnings and revenue up but supply chain issues. Charter Communications (CHTR) reported weak Q3 results, with declining cash flow and customer losses.

Microchip Technology reported Q3 CY2026 revenue of $1.62B, beating estimates, with 42.2% YoY growth. Adjusted EPS was $0.97, also beating estimates. Guidance for Q4 was below expectations. The company cited strong demand in data centers and industrial sectors but noted supply constraints and inventory management challenges. Recent acquisitions and supply chain issues were discussed, with CEO Steve Sanghi highlighting extended lead times and potential margin pressures.

Analysts from B. Riley Securities and Barrington issued bullish ratings and price targets for Shift4 Payments (FOUR), Microchip (MCHP), and Insight Enterprises (NSIT). FOUR received a $77.00 target, MCHP a $85.00 target, and NSIT a $180.00 target. Consensus targets suggest upside potential for all three stocks.

Microchip Technology's stock fell 10% after it forecast December-quarter sales below expectations, despite beating Q3 estimates. The company cited supply chain delays and one-off revenue items. CEO Steve Sanghi noted a potential slowdown in the data center market. Peers Texas Instruments and NXP provided more positive outlooks. Analysts adjusted price targets downward. The stock trades at a discount to its 5-year average.

Microchip Technology reported September quarter sales of $1.622B, exceeding forecasts, but warned of chip shortages due to AI demand. Shares fell 22.55% over two days. CEO Steve Sanghi noted AI buyers are crowding out other customers. December guidance was lowered, with sales expected between $1.573B and $1.638B. Analysts cut price targets but remain above Friday's close of $58.35.