Microchip Technology shares have risen 17.3% year to date, underperforming the Zacks Computer and Technology sector's 19.8% gain, as the company leans on data-center, aerospace and defense growth to offset supply constraints and elevated debt. Microchip expects total data-center revenues to rise roughly 69% from about $591 million in calendar 2025 to approximately $1 billion in 2026, with 14 PCIe Gen6 design wins as of September, comprising 12 PCIe switch wins and two retimer wins, expected to generate meaningful revenues in calendar 2027. The company estimates the longer-term PCIe and retimer addressable markets at roughly $10 billion and $2 billion, respectively, while industrial revenues rose 24.3% year over year and automotive revenues increased 29.3% year over year in the first quarter of fiscal 2027, and aerospace and defense revenues climbed 45.6% year over year to represent 16.7% of sales. Microchip had $5.36 billion of long-term debt as of June 30, 2026, and about 65% of its wafer fabrication is externally sourced, leaving it exposed to foundry, substrate and test capacity constraints. The Zacks Consensus Estimate for fiscal 2027 earnings is $3.63 per share, unchanged over the past 30 days and indicating 121.34% growth over fiscal 2026, with fiscal 2027 revenues pegged at $6.41 billion, suggesting 35.91% growth, while second-quarter fiscal 2027 net sales are guided to $1.59 billion to $1.618 billion and non-GAAP earnings to 91-95 cents per share. Microchip currently carries a Zacks Rank #3 (Hold).
Microchip Technology IncData-center revenue targeted to rise ~69% to ~$1B in 2026 with 14 PCIe Gen6 design wins, plus strong industrial, automotive and aerospace/defense growth.
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