Microchip Technology's (MCHP) strong fiscal Q1 results were buoyed by better cyclical trends and structural tailwinds from its data center and aerospace and defense segments, Morgan Stanley said in a Friday note.

The company posted fiscal Q1 adjusted earnings late Thursday of $0.76 per diluted share, up from $0.27 a year earlier, while revenue rose to $1.48 billion from $1.08 billion.

Morgan Stanley said the June quarter saw the strongest bookings in about four years, improving fiscal Q2 backlog visibility. Data center revenue almost doubled in the quarter, indicating secular strength, the brokerage added.

Microchip's data center growth, however, is "very similar" to peers and fierce competition lingers in the sector, the investment firm noted.

Morgan Stanley raised its price target on Microchip Technology to $103 from $92, with an equal-weight rating.

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