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With a YTD Return of 53.77% as of May 7, Microchip Technology Incorporated (NASDAQ:MCHP) is included among the 10 Best Stocks to Buy to Beat the S&P 500.

On May 7, Reuters reported that Microchip Technology Incorporated (NASDAQ:MCHP) forecast first-quarter revenue above Wall Street estimates, driven by strong demand for its chips used in industrial and automotive markets. Shares of MU company rose more than 2% in extended trading following the announcement. The company has benefited from a cyclical recovery in key end markets, including industrial and automotive. Demand tied to artificial intelligence data centers has also continued to support growth.

At the same time, spending in aerospace and defense markets has remained strong, helped by geopolitical tensions and higher government budgets. That has provided another steady source of revenue growth for the company. Microchip expects first-quarter revenue to range between $1.44 billion and $1.47 billion. That came in above analysts’ average estimate of $1.34 billion, according to data compiled by LSEG. The company also forecast adjusted earnings of 67 cents to 71 cents per share, ahead of estimates of 59 cents per share.

For the fourth quarter, Microchip reported revenue of $1.31 billion, topping estimates of $1.26 billion. Adjusted earnings came in at 57 cents per share, compared with expectations of 51 cents per share.

Microchip Technology Incorporated (NASDAQ:MCHP) provides smart, connected, and secure embedded control solutions. Its semiconductor products business designs, develops, manufactures, and markets mixed-signal microcontrollers, development tools, analog and interface products, timing and connectivity devices, and memory products.

While we acknowledge the potential of MCHP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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