Why Microchip Technology Inc. (MCHP) Soared On Friday
We recently published a list of In this article, we are going to take a look at where Microchip Technology Inc. (NASDAQ:MCHP) stands against other Friday's best-performing stocks.
The stock market edged lower on the last day of the trading week as investors sold off positions to mitigate risks from the anticipated trade talks between the US and China this weekend.
The Dow Jones and the S&P 500 both fell by 0.29 percent and 0.07 percent, respectively. In contrast, the tech-heavy Nasdaq ended flat.
Beyond the major indices, 10 companies traded strongly, finishing with as much as double-digit gains, thanks to the continued positive earnings performance and optimistic outlooks.
In this article, we name Friday's 10 best-performing stocks and detail the reasons behind their gains.
To come up with the list, we considered only the stocks with a $2-billion market capitalization and $5-million trading volume.
A semiconductor wafer at various stages of fabrication, showing the company's range of expertise.
Microchip Technology saw its share prices jump by 12.6 percent on Friday to end at $55.33 apiece as investors loaded up positions after earning a rating upgrade from Bank of America.
In its market note, Bank of America raised Microchip Technology Inc. (NASDAQ:MCHP) to Neutral from Underperform amid the latter's early signs of sales recovery, aggressive cost-cutting measures, and renewed strategic focus under its returning CEO.
'The return of well-regarded prior CEO Steve Sanghi has greatly enhanced the level of restructuring urgency and customer/product focus at Microchip,' Bank of America said.
Additionally, the investment firm raised its price target for Microchip Technology Inc. (NASDAQ:MCHP) to $56 from $44 previously, albeit just a 1.2 percent upside from its latest closing price.
Still, it said that it was confident about the semiconductor manufacturer's earnings potential.
'Even a modest sales rebound could translate into outsized earnings leverage,' it said.
In the first quarter of the year, the company swung to a net loss attributable to shareholders of $156.8 million from a $154.7 million net profit in the same period last year. Net sales dropped by 27 percent to $970.5 million from $1.325 billion year-on-year.
Overall, MCHP ranks 4th on our list of Friday's best-performing stocks. While we acknowledge the potential of MCHP as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than MCHP but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
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