Microchip Technology projects data center revenue to rise 69% to $1 billion in 2026 after a 98% jump last quarter.
Microchip Technology reported a 97.8% year-over-year surge in data center revenue for its fiscal first quarter, accelerating from 77% growth in the prior period. The company now expects its data center portfolio to reach $1 billion in calendar 2026, up 69.3% from last year, driven by strong demand in AI and cloud infrastructure.
Overall net sales rose 38% to $1.485 billion, exceeding guidance, while adjusted earnings per share jumped 181.5% to $0.76. Gross margin expanded to 63.8%, reflecting operational leverage as the company recovers from a prolonged downturn. GAAP net income swung to $202 million from a $46.4 million loss a year earlier.
Shares of Microchip climbed 14% to $85 following the earnings report, reflecting investor optimism over the company’s growth trajectory beyond its traditional microcontroller business.