Microchip Technology Incorporated (NASDAQ:MCHP) is one of the best stocks to invest in for long-term growth. On August 8, Raymond James analyst Melissa Fairbanks maintained her Strong Buy rating on Microchip Technology Incorporated (NASDAQ:MCHP). Fairbanks also increased her price target for the company from $65 to $75, a 13.39% implied upside from the current price of $66.14.
A semiconductor wafer at various stages of fabrication, showing the company’s range of expertise.
The company reported its Q1 FY 2026 earnings on August 7. Its EPS came in at $0.27 per share, representing a solid 12.97% earnings surprise. Fairbanks cited solid Q1 results, with both earnings and outlook ahead of expectations.
The mid-single digit guidance, quarter-over-quarter for the current quarter, reflects a demand-driven recovery, rather than an inventory restocking dynamic, Fairbanks noted. The chip company ceased operations in its fabrication facility in Arizona in May to tackle the high inventories.
The company is developing solutions tailored for AI at the edge, which don’t consume a lot of power. Microchip is also developing advanced solutions for AI in data centers.
Microchip Technology Incorporated (NASDAQ:MCHP) is trading at a reasonable forward PEG of 1.55x, compared to the sector median of 1.83x.
While we acknowledge the potential of MCHP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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