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Arizona-headquartered Microchip Technology Incorporated (MCHP) operates in the analog semiconductor industry and commands a market cap of $49 billion. It designs key parts for electronic devices. Microchip produces various types of simple and advanced microchips across different technologies, like automobiles and communication systems. Its products include power management, device connection, and safety improvement solutions. The company also gives its customers tools to design tailor-made solutions and services.
Companies worth $10 billion or more are generally described as "large-cap stocks," and Microchip fits right into that category with its market cap exceeding this threshold, reflecting its substantial size and influence in the chip sector. Microchip Technology stands out for its cutting-edge microcontroller and semiconductor solutions, propelling innovation in embedded control applications across various industries.
Despite its strengths, Microchip is trading 10.1% lower than the 52-week high of $100.57, achieved on May 24. Moreover, despite shares of Microchip gaining 2.7% over the past three months, it is underperforming the broader Nasdaq Composite’s ($NASX) 9.7% return over the same time frame.
Longer term, MCHP is up 1.3% on the YTD basis and 5.4% over the past 52 weeks, significantly trailing behind the Nasdaq Composite’s 17.8% gains in 2024 and 29.8% returns over the past 52 weeks.
Nevertheless, MCHP’s recent price trend looks bullish. The stock has been trading above its 200-day moving average since mid-November and its 50-day moving average since early March, with some fluctuations.
Despite trailing the broader market, Microchip Technology is cruising in the green this year, navigating its share of highs and lows. On the upside, the chip company’s expansive manufacturing network and robust research and development are commendable. Yet, it’s not all smooth sailing. The company’s low liquidity injects a dose of caution. MCHP stock fell over 1% after the company reported mixed Q4 results and guided Q1 net sales of between $1.22 billion and $1.26 billion, below the consensus of $1.34 billion.
To emphasize the stock’s underperformance, MCHP has underperformed its competitor Analog Devices, Inc. (ADI), which rose 16.4% on a YTD basis and 20.5% over the past 52 weeks.
Despite its underperformance compared to NASX, analysts are bullish about MCHP’s prospects. The stock holds a consensus rating of “Strong Buy” from 22 analysts covering it, and the mean target of $102.09 is a premium of 11.8% to current levels.
On the date of publication, Sristi Jayaswal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
