Lesser Known Chip Stock Scores Analyst Upgrade

Piper Sandler upgraded MCHP to “overweight” from “neutral”

Microchip Technology Inc (NASDAQ:MCHP) doesn’t usually get as much attention as sector peers Nvidia (NVDA), Advanced Micro Devices (AMD), and Intel (INTC), but the semiconductor name is in the spotlight today. Piper Sandler earlier upgraded the shares to “overweight” from “neutral,” and raised its price objective to $100 from $90, noting multiple tailwinds.

At last glance, MCHP is up 1.2% at $82.27 in premarket trading. The equity is bouncing off its lowest level since November, but it remains to be seen whether in can conquer overhead pressure at the 20-day moving average, which capped yesterday’s rally. For 2024, MCHP is down 9.9% as of its previous close.

Options traders are already firmly bullish. This is per the stock’s 50-day call/put volume ratio of 1.60 at International Securities Exchange (ISE), Cboe Volatility Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 88% of readings from the past year.

Plus, Microchip Technology stock sports affordably priced premiums. The equity’s Schaeffer’s Volatility Index (SVI) of 34% ranks higher than 24% of annual readings, meaning options traders are pricing in low volatility expectations.

Leave a Reply

Your email address will not be published. Required fields are marked *