Should I buy Microchip Technology stock in 2025? NZ Insights

What is Microchip Technology?

How much is the Microchip Technology stock?

The price of Microchip Technology stock is rising this week. As of now, the stock trades at $58.11 USD, up 1.13% over the past 24 hours, but down 3.42% for the week. Market capitalisation stands at $31.34 billion, with an average daily volume (3 months) of 12.03 million shares. The P/E ratio is currently not available due to negative earnings, while the dividend yield offers a notable 3.13%. Microchip’s stock beta is 1.41, reflecting slightly higher volatility than the overall market. This mix of recent movement and solid dividend could appeal to NZ investors seeking both income and growth, though some price swings are to be expected.

Our full analysis on the Microchip Technology stock

We have rigorously assessed Microchip Technology’s latest earnings, reviewed its share price trajectory over the past three years, and synthesized financial benchmarks, technical signals, and sectoral competitor analysis through our proprietary screening models. This multifaceted review underscores the company’s evolving profile within the global semiconductor landscape. So, why might Microchip Technology once again represent a compelling strategic entry point into the tech hardware sector as we approach 2025?

Recent Performance and Market Context

Despite a challenging 12 months, with Microchip Technology (NASDAQ: MCHP) declining nearly 40% year-on-year to trade at USD $58.11 as of 30 May 2025 (within a 52-week range of $34.13 to $98.10), recent weeks have evidenced stabilisation and early signs of reversal. The stock posted a positive intraday move of +1.13%, defying sectoral volatility and hinting at growing market conviction. Over the last quarter, Microchip surprised the market with Q4 2025 earnings that modestly beat consensus, underscoring operational resilience amidst inventory normalisation across the semiconductor sector.

This resilience coincides with a marked improvement in global macroeconomic conditions. Technology fundamentals are supported by a cyclical industry recovery, with the CEO publicly declaring that “the industry slowdown is over.” This is mirrored by the revision of Q1 2026 guidance, which offered higher consolidated sales forecasts, and by a series of product announcements positioning the company for renewed growth. The New Zealand investor landscape—which increasingly seeks globally diversified, income-generating tech names—stands to benefit from this pivotal phase.

Technical Analysis

Microchip Technology’s technical setup delivers encouraging signals for prospective entry. The Relative Strength Index (RSI) sits at 59.16—close to, but not yet in, overbought territory—indicating market conditions are constructive without being excessively heated. The MACD (3.21), and Williams %R (-38.87), both present clear buy signals, while the Commodity Channel Index (CCI) at 35.40 remains neutral.

Momentum has shifted with the share price reclaiming and holding above its 20, 50 and 100-day moving averages ($54.89, $48.76, and $52.27 respectively), reinforcing near-term trend strength. Only the 200-day MA ($61.51) presents overhead resistance, which, if surpassed, could confirm a new bullish phase. Technicians will also note robust support at $55.55 and immediate resistance at $59.88. The overall technical consensus—10 bullish, 6 neutral, and 6 bearish signals—leans towards further upside, particularly if the stock consolidates above the $55-$59 pivot.

For NZ-based investors, these momentum indicators suggest that current levels may present a favourable zone for accumulation—well-timed ahead of upcoming potential catalysts.

Fundamental Analysis

Microchip Technology stands out for its proven ability to innovate and adapt. For fiscal 2025, the company reported revenue of $4.4 billion, maintaining a 57% non-GAAP gross margin—demonstrating efficiency even in a down cycle. While net income was marginally negative (-$2.7 million), this was primarily due to sector-wide destocking rather than fundamental operational issues, and the company notably outperformed consensus on both revenue and earnings per share for the latest quarter.

The forward-looking P/E ratio stands at 42.10 and the price-to-sales (TTM) is 7.09—figures which, though elevated by historical standards, reflect the market’s anticipation of an imminent upcycle. With a current dividend yield of 3.13% ($1.82 per annum), Microchip Technology combines growth with income, which is especially attractive for New Zealand investors seeking sophisticated, tech-driven yield opportunities.

On a strategic level, Microchip is globally recognised as a leader in microcontroller design (8-, 16-, and 32-bit), with a diversified portfolio spanning microprocessors, FPGAs, and analog products. Its structural strengths include:

• Market share leadership in embedded control
• Robust R&D and innovation (notably in post-quantum security and AI)
• Long-term customer relationships across automotive, industrial, and communications
• Recurring business model with high switching costs for clients

Despite sector cyclicality, Microchip’s dominant brand and exposure to rapidly expanding applications—AI, automotive, edge computing—arguably position it for outsized gains as demand recovers.

Volume and Liquidity

With a three-month average volume of 12.03 million shares and a public float representing 97.9% of its nearly 540 million outstanding shares, Microchip Technology boasts healthy liquidity and transactional flexibility. Such active trading underpins market confidence and mitigates the risks associated with illiquidity common to midcap tech stocks.

This depth is a positive signal for institutional participation, allowing for more dynamic price discovery and smoother entry/exit points—key attributes for both short- and longer-term NZ investors aiming to deploy meaningful capital efficiently.

Catalysts and Positive Outlook

Looking forward, several bullish catalysts converge:

• Guidance upgrade: The company recently lifted its Q1 2026 revenue forecast to $1.045–1.07 billion, reflecting better-than-expected order flow and a quickening recovery.
• New product cycle: The May 2025 launch of cost-optimized PolarFire Core FPGAs (with a 30% price cut) and the introduction of post-quantum secure embedded controllers place Microchip at the forefront of next-generation technology adoption.
• AI-driven segment growth: Revenue exposure to AI applications has increased from 4% to over 6% in the past year, illustrating rapid penetration in high-value markets.
• Operational turnaround: The CEO’s nine-point plan is already yielding measurable progress, supporting the view that Microchip’s recent trough was cyclical, not structural.
• Improved market conditions: Broader semi-sector sentiment and analyst coverage (21 analysts with a consensus “buy” and a price target of $69.10, implying a near-19% upside) reinforce the sense of a shifting tide.

In summary, Microchip’s ability to capture high-value growth vectors—AI, post-quantum security, and datacenter expansion—suggests renewed earnings momentum on the horizon, possibly ahead of the broader basket of semiconductor peers.

Investment Strategies

For investors considering how to approach Microchip Technology at this juncture, the following perspectives stand out:

• Short-term: With momentum building and support well-established above $55, technically attuned investors may look to enter near current levels, targeting the next resistance at ~$60 and monitoring for a breakout above the 200-day MA.
• Medium-term: For those seeking a re-rating on fundamentals, the run-up to Q2 and Q3 earnings—expected to evidence sequential revenue recovery and margin improvement—presents a favourable window.
• Long-term: Microchip’s positioning marries deep cyclicality with transformational innovation—AI, security, and embedded control—all underpinned by resilient dividend income. For NZ-based retirement, Kiwisaver, or global growth portfolios, a well-timed entry at current levels appears supported both by technicals and by renewed medium-term growth prospects.

In all cases, current price action suggests an ideal entry near a multi-quarter low—a classic setup ahead of sector recovery. Alignment with the company’s major upcoming product launches and increased AI exposure add weight to a patiently optimistic approach.

Is It the Right Time to Buy Microchip Technology?

Synthesising recent results, sector dynamics, and Microchip’s unique blend of market leadership, diversified innovation, and resilient income, the stock seems to represent an excellent opportunity as the semiconductor cycle turns. With rising order books, a rapidly growing AI-related revenue base, and an upgraded management outlook, Microchip appears poised to reclaim lost ground and potentially enter a new bullish phase.

For New Zealand investors seeking a globally diversified technology exposure that balances capital growth potential with an attractive dividend yield, the fundamentals of Microchip Technology clearly justify renewed interest at present levels. As product cycles, earnings, and sector sentiment all trend upward, Microchip Technology may well be on the cusp of a lucrative recovery phase—making this a name to watch, and possibly to favour, in strategic portfolios approaching 2025.

Microchip Technology stands out as a bellwether for anticipated tech sector resilience and growth, presenting a compelling opportunity for those determined to participate in the next wave of semiconductor innovation and value creation.

How to buy Microchip Technology stock in New Zealand?

Buying shares of Microchip Technology (NASDAQ: MCHP) online as a New Zealand investor is straightforward and secure, thanks to the presence of reputable, regulated brokers. You have two main options: you can directly purchase Microchip Technology shares (called “spot buying”) and become a part-owner, or you can trade Contracts for Difference (CFDs), which allow you to speculate on the share price—often with leverage and the option to go long or short. Each approach meets different investing needs; we’ll outline both. For a side-by-side comparison of recommended brokers for NZ clients, refer to our table further down the page.

Spot buying

Spot buying means purchasing actual Microchip Technology shares on the US stock market through your broker. You become the legal owner of the stock and may receive dividends. NZ-based brokers typically charge a fixed commission per order; for US stocks, this is often in the range of NZD $5 to $15 per trade, depending on the platform.

Example – Spot buying Microchip Technology

Suppose the Microchip Technology share price is $58.11 USD (approx. NZD $95 at a rate of 1 USD = 1.635 NZD). With a NZD $1,000 stake, and factoring in a brokerage fee of NZD $5, you can buy about 10 shares (NZD $950 / NZD $95 = 10, remainder for fees).

✔️ Gain scenario: If the share price rises by 10%, your 10 shares are now worth NZD $1,045 (NZD $104.50 per share).

Result: $95 gross gain (before fees), i.e., +10% on your investment.

Trading via CFD

CFD (Contract for Difference) trading lets you speculate on the price movements of Microchip Technology shares without owning the underlying asset. This means you can benefit from rising or falling prices and apply leverage to amplify your exposure. CFD fees typically consist of a variable spread (the difference between buy/sell price) and overnight financing charges if you hold a position for more than one day.

Example – CFD Trading Microchip Technology

Let’s say you start with NZD $1,000, using 5x leverage. You open a CFD position equivalent to NZD $5,000 of Microchip Technology shares.

✔️ Gain scenario: If the share price increases by 8%, your position gains 8% × 5 (leverage) = 40%.

Result: NZD $400 potential gain on a NZD $1,000 margin (excluding spreads and overnight fees).

Final advice

No matter which method you choose, it’s essential to compare brokers’ fees, trading platforms, and additional services before committing your funds. Some brokers are better suited for buy-and-hold investors, while others specialise in leveraged trading. Your choice should align with your investment goals, risk tolerance, and preferred strategy. Be sure to check our comprehensive broker comparison further down the page to find the platform that best matches your needs.

Our 7 tips for buying Microchip Technology stock

The latest news about Microchip Technology

Microchip Technology has raised its revenue guidance for Q1 2026 following stronger-than-expected market performance. In the company’s official update from 29 May 2025, Microchip’s management attributed this upward revision to a surprisingly robust demand environment, with CEO Steve Sanghi stating that business activity has surpassed initial forecasts for the quarter. Sales are now projected to reach between $1.045 and $1.070 billion. For New Zealand-based analysts and investors, this signals resilience in global semiconductor demand, a key input for NZ’s expanding tech, research, and IoT manufacturing sectors, which are heavily reliant on international component suppliers such as Microchip.

The Q4 2025 financial results exceeded analyst expectations, with both EPS and revenue coming in ahead of consensus. For the quarter ended 31 March 2025, Microchip delivered a non-GAAP EPS of $0.11—10% above estimates—and slightly surpassed revenue forecasts, despite challenging sector conditions. Such consistent outperformance is typically viewed positively by institutional investors, including those in New Zealand who track global technology benchmarks or hold exposure via international growth funds or regional ETFs, reinforcing confidence in Microchip as a stable supplier to the local market.

Recent major product launches, including quantum-resistant controllers and cost-reduced FPGAs, strengthen Microchip’s competitive edge. In May 2025, Microchip introduced new FPGA products at 30% lower prices and launched embedded controllers designed to withstand quantum cybersecurity threats. These innovations directly benefit industries in NZ engaged in automation, defense, or critical infrastructure, who require secure, cost-effective, and future-ready components sourced from reputable global leaders, contributing to the digital resilience and competitiveness of local companies.

Technical indicators currently support a bullish outlook, with the latest analyst consensus pointing to substantial upside potential. At the close of May, technical momentum—measured by signals such as MACD and moving averages—remains positive, and the analyst price target implies roughly 19% upside from current levels. Global optimism can have a follow-through effect on regional investor confidence in New Zealand, especially given the strong role played by leading international securities in local portfolios and retirement schemes (such as KiwiSaver).

Sector momentum is reinforced by recovery signals, with Microchip’s CEO declaring the semiconductor industry downturn over. The statement that “the industry slowdown is over,” paired with rising AI-related revenues (now over 6% of total sales) and improved order volumes, aligns with broader recovery trends visible in the Australasian advanced manufacturing and digital sectors. For New Zealand enterprises relying on sophisticated semiconductor supply chains, this marks a constructive backdrop for capital spending, R&D, and strategic planning involving Microchip solutions.

FAQ

P. Laurore

Finance expert

Co-founder of HelloSafe and holder of a Master's degree in finance, Pauline has recognised expertise in personal finance, which she uses to help users better understand and optimise their financial choices. At HelloSafe, Pauline plays a key role in designing clear, educational content on savings, investments and personal finance. Passionate about financial education, Pauline strives, with every piece of content she oversees, to provide reliable, transparent and unbiased information for independent and informed financial management. To this end, she has tested over 100 trading platforms to help internet users make the right choices.