We recently compiled a list of the 15 Semiconductor Stocks Making Impressive Comeback From DeepSeek AI Dip. In this article, we are going to take a look at where Microchip Technology Incorporated (NASDAQ:MCHP) stands against the other semiconductor stocks.
The semiconductor industry has always been a battleground for technological development, though lately, it has turned into a full-scale battle. The US and China are not only vying to outpace each other in the race to achieve AI superiority but are also actively trying to slow each other down.
The US for instance has placed a number of export restrictions on global firms selling semiconductor technologies to China. Many leading US companies have had to deal with declining China sales as a result of these restrictions. On the other hand, China is trying its best to come up with technologies that compete with those in the US, despite restrictions.
The emergence of DeepSeek AI at the end of January was a wake-up call for the Americans, with China building its latest AI model for a fraction of the cost that the US counterparts spend on their models. While the validity of these claims is debatable, it does show how far China has come when it comes to competing with the US.
As a result of the DeepSeek AI announcement, many semiconductor stocks took a big hit. Two weeks later, some of the stocks started recovering and investors started feeling comfortable with the thought of continued technological dominance by the US. We therefore decided to look at the semi-stocks that were making a comeback from the DeepSeek dip.
To come up with the list of 15 semiconductor stocks making a comeback from DeepSeek AI dip, we only considered stocks with a market cap of at least $10 billion that beat the S&P 500 in the last 5 days of trading.
A semiconductor wafer at various stages of fabrication, showing the company’s range of expertise.
Microchip Technology Incorporated (NASDAQ:MCHP)
Microchip Technology Incorporated (NASDAQ:MCHP) is a manufacturer, developer, and seller of connected, secure, and smart embedded control solutions. The company provides general-purpose microcontrollers and specialized microcontrollers for computing, power supplies, security, and other applications. The stock is up 6.33% in the last week against the S&P 500’s 1.13% gains.
It is the company’s Q3 2025 earnings that is driving the recent rally. After a disappointing year for shareholders, there is hope that the worst is behind the firm. It reported a 41.9% YoY decline in revenues, mainly due to inventory corrections recorded across all products globally.
The upside in the stock during the last week can be explained with a positive outlook. To start with, Microchip is working on improving efficiency by reorganizing business units and carrying out capacity adjustments at its manufacturing facilities. The company has also decided to close down its Tempe Fab. The inventory, which now stands at 266 days compared to 247 days in the last quarter, is a major area of concern for Microchip. The CEO stated on the earnings call that he is working on halving the inventory days, a move that could free up $250 million cash by FY2026 end.
Microchip’s upcoming products include the 64-bit RISC-V processor with AI powers as well as advanced networking solutions for the automotive industry. The firm’s innovation in the FPGA segment is also gaining strength as it continues to serve industries like AI applications for medical imaging and space exploration.
Overall MCHP ranks 6th on our list of the semiconductor stocks that are making impressive comeback from DeepSeek AI Dip. While we acknowledge the potential of MCHP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as MCHP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
