Stock Analysis | Microchip Technology Outlook - A Bullish Setup Amid Mixed Analyst Signals

Market Snapshot

Headline takeaway: Microchip Technology (MCHP) shows a strong technical setup with a 7.18 internal diagnostic score, but fundamentals are struggling with a low 1.84 score.

News Highlights

Recent headlines highlight shifting dynamics in the semiconductor sector:

• McKinsey on Tariffs and Chip Supply Chains: McKinsey’s latest report suggests that US tariffs are shaping chip supply chain strategies. Given Microchip’s position in the sector, this could mean potential market shifts.
• Japan-U.S. Rare Earths Cooperation: Reports show Japan is set to propose collaboration with the U.S. on rare earths and semiconductors. This could indirectly benefit Microchip through a more stable global supply chain.
• SOXX ETF Outflow: The U.S. Semiconductors ETF SOXX saw a $750M net outflow in May 2025, which might signal investor caution across the sector, including Microchip.

Analyst Views & Fundamentals

Average analyst rating: 4.75 (simple mean); weighted rating: 3.70 (performance-weighted). Analysts remain divided, with strong buy and buy ratings dominating.

• Price vs. Expectations: Despite a recent price drop of -4.66%, analysts are still optimistic, suggesting the stock could rebound.
• Fundamental highlights:
  • Net cash flow from operating activities per share (YoY growth rate %): -73.66% (score: 1)
  • Total profit (YoY growth rate %): -84.94% (score: 1)
  • Net profit attributable to parent company shareholders / Net profit (%): 100.0% (score: 7.87)
  • Net profit attributable to parent company shareholders (YoY growth rate %): -84.42% (score: 1)
  • Cash-UP: -2.15 (score: 2)
  • Cash-MV: -1.998 (score: 0)

Money-Flow Trends

Big-money inflows: Large and extra-large investors are pushing into Microchip, with 58.17% of inflow coming from extra-large investors. Retail flows are also positive at 50.70%.

• Big-money inflow ratio: 56.07%
• Overall inflow ratio: 55.08%
• Market sentiment: The overall flow is positive, with both institutional and retail investors showing confidence.

Key Technical Signals

Microchip's technical indicators are largely bullish, with no bearish signs in the last 5 days. The technical score is 7.18, indicating a cautious and optimistic stance.

• MACD Death Cross: 8.2 internal diagnostic score – strong bullish signal with historical accuracy of 83.33%.
• Long Lower Shadow: 7.87 internal diagnostic score – bullish bias with a 71.43% win rate.
• WR Oversold: 6.31 internal diagnostic score – neutral rise, with mixed results historically.
• Dividend Payable Date: 6.33 internal diagnostic score – neutral impact with a 66.67% historical win rate.

Recent chart patterns:

• 2025-09-02: WR Oversold and MACD Death Cross
• 2025-09-04: Long Lower Shadow
• 2025-09-05: Dividend Payable Date

Trend quality: Indicators suggest a volatile but bullish setup with unclear direction, but more bullish signals are emerging.

Conclusion

Actionable takeaway: Microchip Technology is showing strong technical momentum with a 7.18 internal diagnostic score, but fundamentals remain weak. Investors should watch for a pullback or a breakout following the recent technical activity and consider the sector's broader dynamics in light of US tariffs and global supply chain trends.