Microchip Technology (NASDAQ: MCHP) saw its stock surge 7.73% in 24 hours on Thursday, following the release of its fourth-quarter fiscal 2025 results and optimistic forward guidance. The semiconductor company's performance exceeded expectations, signaling a potential recovery in the challenging chip market.

For the fourth quarter, Microchip reported sales of $970.5 million, surpassing analysts' estimates of $962.76 million. While this represents a 26.8% decrease from the same period last year, it aligns with the broader industry slowdown. More impressively, the company provided a revenue outlook of $1.02-1.07 billion for the first quarter of fiscal 2026, well above analysts' expectations of $987.6 million.

Investors were particularly encouraged by CEO Steve Sanghi's comments, who stated that the March quarter likely marks "the bottom of this prolonged industry down cycle for Microchip." The company also revealed that its bookings in April were higher than any month in the March quarter, hinting at strengthening demand. These positive signals, combined with the company's focus on expanding its technology offerings in automotive and industrial applications, have boosted investor confidence in Microchip's growth prospects amid a challenging semiconductor market.