Microchip Technology (MCHP) Shares Surge After Q3 Sales Outlook Raised

Microchip Technology Incorporated (MCHP) shares surged over 4% in extended trading on Monday, January 5, 2026, following the company’s announcement that fiscal third-quarter revenue will significantly exceed its previously raised forecast. The stock jumped to $69.80 in pre-market trading on Tuesday, up $2.74 or 4.09% from Monday’s close of $67.06, which itself had gained 3.12% during regular hours.

The strong rally came after Microchip revealed it expects revenue of approximately $1.185 billion for the quarter, well above the guidance range of $1.109 billion to $1.149 billion that was issued in November and revised in December. The semiconductor company’s upbeat outlook reflects a broad-based recovery across most end markets and exceptionally strong bookings activity.

Improving Demand Lifts Q3 Revenue Forecast

CEO and President Steve Sanghi attributed the improved outlook to exceptionally strong bookings activity during the December quarter, despite the holiday-filled period. “Our bookings activity was very strong in the December quarter despite a holiday filled quarter. Our March quarter starting backlog started out much better than that for the December quarter,” Sanghi stated.

The company is experiencing a recovery as clients finish working through excess chip stockpiles accumulated during the pandemic that had previously hammered demand. Sanghi emphasized that the company has made substantial progress on most elements of its nine-point recovery plan as well as strategic initiatives, positioning Microchip for what he expects to be “a very good calendar year 2026.”

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MCHP Stock Performance and Market Reaction

MCHP shares traded at $69.80 in pre-market trading at 7:17:56 AM EST on January 6, 2026, up $2.74 or 4.09% from the previous close of $67.06. The stock had already gained 3.12% during regular trading hours on January 5. The company has significantly reduced its internal inventory levels, which will begin to lower the amount of inventory write-offs going forward.

Additionally, Microchip is preparing to ramp up factory production in the March quarter, which will help reduce under-utilization charges that have been impacting margins. With a market capitalization of $36.242 billion and analyst price targets averaging $76.20, the stock appears positioned for continued momentum as the company executes its recovery plan. Microchip is scheduled to report its fiscal third-quarter results on February 5, 2026.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.