Why is Microchip Technology stock sliding today?
Investing.com ·
Why is Microchip Technology stock sliding today?
Investing.com -- Microchip Technology stock slid 10.3% in morning trading after the company’s fiscal Q2 2027 earnings report, released after Thursday’s close, delivered a weaker-than-expected outlook for the December quarter.
While second-quarter results were strong — revenue rose 42.2% year over year to $1.622 billion and non-GAAP EPS of $0.97 topped the $0.93 analyst consensus — management guided Q3 net sales to a range of down 3% to up 1% sequentially, with the midpoint coming in below Wall Street estimates. The company attributed the softer guidance to supply constraints at foundries, outsourced semiconductor assembly and test providers, and internal manufacturing operations, which are delaying shipments of higher-margin products into the March quarter.
Adding to the pressure, CEO Steve Sanghi made a striking comment during the earnings call, declaring that "data center is in the bubble" — a remark that reverberated across the semiconductor sector and weighed on investor sentiment. Today’s session also brought a cascade of analyst price target reductions: Cantor Fitzgerald cut its target from $125 to $100, Needham trimmed from $120 to $85, Rosenblatt lowered from $120 to $115, Mizuho reduced from $112 to $90, Susquehanna cut from $120 to $100, and Truist Securities slashed its target from $90 to $62. Despite the cuts, most analysts maintained constructive ratings, with the consensus sitting at "Moderate Buy" and an average target of $94.62.
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