Microchip Technology shares soar on upbeat guidance

Shares of Microchip Technology (NASDAQ:MCHP) saw a significant surge early Friday, climbing as much as 18.2% to hit a two-month high of $58.06.

The sharp increase followed the embedded control solutions provider's late Thursday release of an optimistic forecast for the current fiscal quarter, exceeding Wall Street's expectations and suggesting a potential recovery in semiconductor demand.

Microchip Technology, based in Chandler, Arizona, projected fiscal first-quarter adjusted earnings per share (EPS) of 18 to 26 cents, comfortably above the analyst consensus estimate of 16 cents.

The company also anticipates net sales for the quarter to be in the range of $1.02 billion to $1.07 billion, surpassing the estimated $987.6 million.

This upbeat guidance indicates improving business conditions after a period of softer demand in the semiconductor market.

Despite Friday's strong performance, Microchip Technology shares are still down approximately 3% year-to-date.