Microchip Technology (MCHP) jumped 14.5% in after-hours trading on June 1, hitting $104.89 — putting it within reach of its 52-week high of $105.91.
Microchip Technology Incorporated, MCHP
The catalyst was a dedicated press release from the company breaking out its Data Center Solutions Business Unit as a separately reported segment for the first time.
The unit pulled in $302.7 million in revenue during calendar year 2025. Microchip now expects that figure to grow roughly 65% in 2026, reaching approximately $500 million.
CEO Steve Sanghi pointed to the March 2026 quarter as further evidence of momentum, with the data center unit already up 62.9% year-over-year in that period.
The product lineup driving that growth includes storage controllers, PCIe and CXL memory controllers, and Switchtec PCIe switch and retimer products. The company also recently launched XpressConnect PCIe 6.0 and CXL 3.1 retimers designed for AI data center applications.
Alongside the data center update, Microchip said it will implement selective price increases across its broader product portfolio.
Management said the decision came after concluding that rising input costs are broad-based and cannot be fully absorbed internally.
The price increases won’t affect guidance for the June quarter since they’re coming late in the period. But markets read the move as a sign of pricing discipline rather than distress.
That combination — accelerating revenue in a high-growth segment plus a willingness to push prices — gave investors two reasons to buy in the same session.
UBS analyst Timothy Arcuri reiterated a Buy rating on MCHP with a $130 price target on June 2.
The firm noted the data center segment represents about 7% of total revenue in 2025 and could hit 8–9% in 2026 based on UBS estimates. UBS also flagged that growth is lagging some key peers, though it maintained its constructive stance.
Across the broader analyst community, 26 analysts carry a Buy rating on the stock. Twenty-one have revised their earnings estimates upward ahead of the next reporting period.
MCHP was up roughly 45% year-to-date and 63% over the past six months before Monday’s after-hours move.
The broader market ended the day with modest gains — the S&P 500 up 0.3%, Nasdaq up 0.4% — confirming the move in MCHP was entirely stock-specific.
CEO Steve Sanghi and CFO Eric Bjornholt are scheduled to present at the B of A Securities Global Technology Conference on June 2, 2026.
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