.August 16, 2024 Friday 06:58 PM

Piper Sandler analysts upgraded Microchip Technology (NASDAQ:MCHP) to Overweight, citing potential growth drivers on the horizon. MCHP’s gross margins are expected to improve as recent challenges ease, leading to better earnings. The company’s product technology is well-positioned in automotive and industrial sectors, with December guidance expected to reflect positive results. Two key factors will drive gross margin improvement: declining underutilization charges as revenue picks up, and diminishing impact of inventory reserve charges as market conditions improve. Margins could reach 65% by fiscal year 2026, up from a recent low of 59% in September.