Microchip Technology Plunges 11.04% to 2025 Low on Weak Guidance, Inventory Woes

The share price fell to its lowest level since May 2025 today, with an intraday decline of 11.04%.

Microchip Technology’s recent selloff reflects a combination of weak guidance and persistent inventory challenges. The company cut its Q3 and Q4 2026 revenue forecasts below consensus estimates, citing softer demand in automotive and industrial sectors as customers work through excess stock. A 9.8% drop followed the Q4 outlook, underscoring investor concerns over near-term growth. Management’s acknowledgment of prolonged sector normalization and seasonal weakness in December further dampened sentiment, compounding pressure from a broader semiconductor industry correction.

Analysts remain divided on the stock’s trajectory, with some lowering price targets amid pessimism over demand recovery, while others highlight long-term opportunities in AI and IoT. Despite strategic strengths in manufacturing efficiency and product innovation, Microchip’s short-term execution risks—such as inventory overhang and macroeconomic headwinds—continue to dominate market focus. The stock’s 27.5% decline from its 52-week high reflects skepticism about its ability to balance immediate challenges with its high-growth positioning in emerging markets.

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