Raymond James Rates Microchip (MCHP) Strong Buy on AI and Earnings

Microchip Technology Incorporated (NASDAQ:MCHP) is one of the best stocks to invest in for long-term growth. On August 8, Raymond James analyst Melissa Fairbanks maintained her Strong Buy rating on Microchip Technology Incorporated (NASDAQ:MCHP). Fairbanks also increased her price target for the company from $65 to $75, a 13.39% implied upside from the current price of $66.14.

Raymond James Rates Microchip (MCHP) Strong Buy on AI and Earnings

A semiconductor wafer at various stages of fabrication, showing the company’s range of expertise.

The company reported its Q1 FY 2026 earnings on August 7. Its EPS came in at $0.27 per share, representing a solid 12.97% earnings surprise. Fairbanks cited solid Q1 results, with both earnings and outlook ahead of expectations.

The mid-single digit guidance, quarter-over-quarter for the current quarter, reflects a demand-driven recovery, rather than an inventory restocking dynamic, Fairbanks noted. The chip company ceased operations in its fabrication facility in Arizona in May to tackle the high inventories.

The company is developing solutions tailored for AI at the edge, which don’t consume a lot of power. Microchip is also developing advanced solutions for AI in data centers.

Microchip Technology Incorporated (NASDAQ:MCHP) is trading at a reasonable forward PEG of 1.55x, compared to the sector median of 1.83x.

While we acknowledge the risk and potential of MCHP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MCHP and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.