Microchip Technology MCHP is expanding its portfolio with a significant update to its IGBT 7 devices offered in different packages, multiple topologies, and current and voltage ranges.
 
The new portfolio is tailored for high-growth sectors, including sustainability, e-mobility and data centers, and is designed to meet the growing demands for high efficiency, compact size and enhanced performance in power electronics.
 
Designers can choose from IGBT 7 devices in standard D3 and D4 62 mm, and SP6C, SP1F and SP6LI packages, with configurations that include NPC, three-phase bridge and boost/buck chopper.
    
Microchip Technology offers a wide range of power management solutions, including analog devices and silicon and silicon carbide technologies. With rising demand for energy-efficient systems, MCHP is well-positioned to benefit from growing market segments like e-mobility, data centers and sustainability.

The IGBT 7 devices offer a combination of ease of use, cost efficiency and high power density, and are suitable for both general industrial uses, and specialized aerospace and defense applications.

MCHP Shares Underperform Industry & Sector

Microchip Technology’s shares have lost 26.2% year to date, underperforming the broader Zacks Computer & Technology Sector’s appreciation of 30% and the Zacks Semiconductor - Analog and Mixed industry’s decline of 2%.

MCHP's share price decrease has been influenced by a drop in sales growth. Notably, sales fell 48.4% year over year to $1.164 billion in the second quarter of fiscal 2025.

The decline in sales was due to ongoing customer destocking and weak demand across end markets, particularly in the consumer and automotive sectors, with a sequential drop of nearly 22%. This factor is expected to hurt top-line growth in the near term.

Despite a strong portfolio, weak top-line growth is expected to drag down MCHP shares in the near term.

Microchip Technology Q3 Guidance Implies Slower Growth

For the third quarter of fiscal 2025, MCHP expects net sales between $1.03 billion and $1.10 billion.

The Zacks Consensus Estimate for third-quarter fiscal 2025 sales is pegged at $1.06 billion, indicating a year-over-year decline of 39.87%.

Non-GAAP earnings per share are expected between 25 cents and 35 cents for the third quarter of fiscal 2025.

The consensus mark for MCHP’s third-quarter fiscal 2025 earnings is pegged at 32 cents per share, down 33.33% over the past 30 days. The estimate suggests a 70.37% year-over-year decline.

MCHP’s Zacks Rank & Valuation

Microchip Technology currently carries Zacks Rank #5 (Strong Sell), which implies that investors should stay away from the stock for the time being.

MCHP’s Value Score of F indicates a stretched valuation at this moment.

Stocks to Consider

Amphenol APH, BILL Holdings BILL and Fortinet FTNT are three better-ranked stocks from the broader sector. The three stocks currently sport Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rates for Amphenol, BILL Holdings and Fortinet are pegged at 16.39%, 13.41 and 17.76%, respectively.

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