Microchip posts 38% sales growth in Q1, analysts keep Buy rating despite valuation concerns

Microchip Technology reported a strong Q1 2027 with net sales up 38% year-over-year to $1.485 billion, surpassing guidance. Analyst B. Riley maintained a Buy rating and set a $108 price target, down from $125 but still indicating growth potential from the $74.36 stock price. The company showed strong profitability with a 63.8% gross margin and expects significant growth in its data center segment. However, the stock is seen as modestly overvalued partly due to $18.9 million in special legal charges, leading to cautious analyst outlooks.