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Microchip Tech (MCHP) Surges 11.7%: Is This an Indication of Further Gains?

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Microchip Technology (MCHP - Free Report) shares soared 11.7% in the last trading session to close at $74.87. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 0.4% loss over the past four weeks.

Microchip is benefiting from growing AI investments. The company’s Gen 4 and Gen 5 data center products are witnessing strong sales growth.

This chipmaker is expected to post quarterly earnings of $0.38 per share in its upcoming report, which represents a year-over-year change of +90%. Revenues are expected to be $1.14 billion, up 11.5% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Microchip Tech, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on MCHP going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Microchip Tech belongs to the Zacks Semiconductor - Analog and Mixed industry. Another stock from the same industry, Analog Devices (ADI - Free Report) , closed the last trading session 5.6% higher at $292.94. Over the past month, ADI has returned -0.7%.

Analog Devices' consensus EPS estimate for the upcoming report has remained unchanged over the past month at $2.28. Compared to the company's year-ago EPS, this represents a change of +39.9%. Analog Devices currently boasts a Zacks Rank of #1 (Strong Buy).


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