This Chip Maker Is the S&P 500’s Top Stock Today. It’s Having a Great Quarter.

Microchip Technology and other low-end chip makers have had a difficult year. (Dreamstime)

Key Points

• Microchip Technology raised its fiscal third-quarter adjusted earnings forecast to 40 cents per share from a range of 32 to 40 cents.
• The company now anticipates net sales growth of approximately 1% from the prior quarter, an improvement from an earlier forecast of a decline of less than 1%.
• Microchip shares increased 12% to $63.61, their largest single-day percentage gain since May 9 and bringing the stock into positive territory for 2025.

Microchip Technology was the top performer in the S&P 500 on Wednesday after the chip maker boosted its financial forecasts for the current quarter.

Microchip now expects adjusted earnings of 40 cents a share for its fiscal third quarter, which ends in December. The company’s previous call was for a profit of 32 cents to 40 cents a share. Microchip also anticipates net sales growth of roughly 1% from the prior quarter, while the midpoint of the range it had forecast earlier pointed to a decline of less than 1%.

“With two months of the quarter behind us, our business is performing better than we expected at the time of our November 6, 2025 earnings conference call,” CEO Steve Sanghi said in a statement. Sanghi is slated to speak at the UBS Global Technology and AI Conference later Wednesday afternoon.

Shares of Microchip climbed 12% to $63.61, their largest one-day percentage gain since May 9, according to Dow Jones Market Data.

The second-best performer in the S&P 500 was fellow chip maker ON Semiconductor, which rose 11%, its eighth consecutive daily gain. Other semiconductor names like Texas Instruments and Qualcomm also moved higher Wednesday.

Wednesday’s rise brought Microchip stock into the black for 2025, a difficult year for makers of low-end semiconductors not tied to the artificial intelligence boom. Most of the damage came at the beginning of the year; Microchip is now up roughly 75% since its 52-week closing low of $35.34 on April 8.

Analysts at KeyBanc Capital Markets lifted their estimates for Microchip’s fiscal fourth quarter in light of management’s commentary about the third quarter. The firm reiterated an Overweight rating and an $85 price target on Microchip shares in a research note.

Citi chose not to change its estimates, which were already higher than the Wall Street consensus. The bank expects the company to demonstrate the strongest earnings growth in the industry once the analog semiconductor market heats up because the current down cycle has weighed on its profits. Citi maintained a Buy rating and an $80 price target.

Write to Nate Wolf at nate.wolf@barrons.com