Truist Cautious on Microchip Technology (MCHP) After Q3 Beat But Below-Consensus Q4 Guidance

MCHP +1.43% MCHPP +1.16% TFC -0.17% QQQ +0.88%

Microchip Technology Incorporated (NASDAQ:MCHP) is one of the best QQQ stocks to buy according to Wall Street analysts. On November 10, Truist analyst William Stein lowered the firm’s price target on Microchip to $60 from $64 while maintaining a Hold rating on the shares. This decision was made as the firm noted that the company beat Q3 2025 modestly, but guided Q4 somewhat below consensus.

In its Q3 report, the company announced that its net sales for the December quarter were $1.026 billion, which was a sequential drop of 11.8% and a steep 41.9% year-over-year decline. This broad-based weakness was noted across all major geographies and product lines, including microcontrollers and analog. The company reported a Non-GAAP net income of $107.3 million, which led to Non-GAAP EPS of $0.20.

Looking ahead, the company guided for the March quarter net sales to be between $920 million and $1 billion. Despite the near-term difficulties, Microchip is focused on innovation and efficiency. The company introduced a new generation of 64-bit RISC-V processors with advanced AI capabilities, which has seen a strong initial customer response. It also expanded its Wi-Fi portfolio with 20 new products for secure wireless connectivity and achieved the highest level of space certification for its radiation-hardened chips.

Microchip Technology Incorporated (NASDAQ:MCHP) develops, manufactures, and sells smart, connected, and secure embedded control solutions in the Americas, Europe, and Asia. It operates through two segments: Semiconductor Products and Technology Licensing.

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.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey.