What's in Store for These 3 Semiconductor Stocks This Earnings Season?

Semiconductor companies are likely to have witnessed strong performance in the December-end quarter, driven by solid demand. The industry is continuing its dream run, which is evident from growing semiconductor sales. Citing data compiled by the World Semiconductor Trade Statistics, the Semiconductor Industry Association (SIA) revealed that the global semiconductor sales soared 29.8% year over year to $75.3 billion in November 2025.

Semiconductor players like Microchip Technology MCHP, Monolithic Power Systems MPWR, and MACOM Technology Solutions MTSI are slated to report their respective financial results on Feb. 5.

Factors Likely to Shape Semi Stock’s Performance

Companies in the semiconductor industry are likely to have gained from the robust sales growth across a wide range of products, including microprocessors, microcontrollers, memory chips, RFID modules, power management ICs, digital signal processors, security authentication modules, optical chips, edge AI controllers, and advanced driver assistance systems, among others.

The companies in this space are expected to have benefited from the rise in microchip sales, driven by the growing demand from hyperscalers, cloud service providers, telecom, artificial intelligence, and data center customers who are dedicating a significant part of their capital expenditure to acquire more powerful chips. As these artificial intelligence (AI)-based companies and hyperscalers proliferate, the semiconductor companies are likely to benefit from this growth.

Inventory normalization among industrial and automotive customers is expected to have driven semiconductor sales. Semiconductor manufacturers are likely to have benefited from increased sales and improved margins as easing inflation reduces pricing pressure in the to-be-reported quarter.

Semi Earnings in Focus: Preparing for Upcoming Results

In light of these conditions, let’s examine the positioning of the following semiconductor companies ahead of their earnings announcements on Feb. 5, and assess their ability to handle the current market challenges.

Our quantitative model predicts an earnings beat for a company if it has a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). This combination increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Let’s delve deeper.

Microchip Technology is set to report third-quarter fiscal 2026 results. The stock has an Earnings ESP of +1.34% and sports a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Microchip Technology’s third-quarter 2026 revenues is pegged at $1.19 billion, which indicates a 15.5% increase from the year-ago quarter. The consensus estimate for earnings is pegged at 43 cents per share, which implies a year-over-year increase of 115%.

Microchip’s third-quarter fiscal 2026 performance is likely to have benefited from improving inventory levels, which are expected to have supported the company's prospects in the to-be-reported quarter. Inventory days declined to 199 days at the end of the second quarter compared with 266 days three quarters earlier, while year-to-date inventory was reduced by $261 million.

The company continues to benefit from new customer designs moving into production, particularly across industrial, automotive, aerospace, and data center markets. Management noted improving conditions across these end markets, which, along with Microchip’s product portfolio in microcontrollers and data center solutions, is expected to have supported revenues in the to-be-reported quarter.

However, inventory write-offs and factory underutilization charges are likely to have hurt the company's profitability in the to-be-reported quarter. In the second quarter, these charges totaled $122.8 million, reducing non-GAAP gross margin by 10.8 percentage points, and management indicated that meaningful reductions in underutilization charges are more likely from the March quarter onward, suggesting that margin recovery in the third quarter may be limited.

Microchip Technology Incorporated Price and EPS Surprise

Microchip Technology Incorporated price-eps-surprise | Microchip Technology Incorporated Quote

Monolithic Power Systems is set to report fourth-quarter 2025 results. The stock has an Earnings ESP of 0.00% and a Zacks Rank #2 at present.

The Zacks Consensus Estimate for Monolithic Power Systems’ fourth-quarter 2025 revenues is pegged at $740.72 million, which indicates a 19.2% increase from the year-ago quarter. The consensus estimate for earnings is pegged at $4.73 per share, which implies a year-over-year increase of 15.6%.

Monolithic Power Systems’ fourth-quarter 2025 results are likely to have benefited from steady demand across enterprise data, automotive, and industrial markets. Healthy demand from enterprise data customers, supported by early adoption of its power modules and high-density power solutions used in AI servers and data centers, is likely to have supported performance in the to-be-reported quarter.

In the third quarter, management highlighted a new ADAS design win with a Tier-1 supplier and noted that more vehicles, including non-EV cars, are adopting ADAS features. Rising electronic content per vehicle is likely to have contributed positively to the company's prospects in the fourth quarter.

However, orders from customers remain short-term in nature, with no meaningful buildup in backlog. As a result, gross margins, which were around the mid-55% range in the third quarter, are expected to have remained largely flat on a sequential basis in the to-be-reported quarter.

Monolithic Power Systems, Inc. Price and EPS Surprise

Monolithic Power Systems, Inc. price-eps-surprise | Monolithic Power Systems, Inc. Quote

MACOM Technology Solutions is set to report first-quarter fiscal 2026 results. The stock has an Earnings ESP of 0.00% and a Zacks Rank #3 at present.
The Zacks Consensus Estimate for MACOM Technology Solutions’ first-quarter fiscal 2026 revenues is pegged at $268.91 million, which indicates a 23.3% increase from the year-ago quarter. The consensus estimate for the bottom line is pegged at 99 cents per share, which implies a year-over-year increase of 25.3%.

MACOM Technology Solutions’ first-quarter fiscal 2026 performance is likely to have benefited from strong momentum in the Data Center business. Demand for 800G and 1.6T optical products remains strong as cloud customers continue to build AI and high-performance computing infrastructure. Management expects Data Center revenues to grow about 5% sequentially in the first quarter, supported by strong bookings and a record backlog entering the quarter.

Strong Demand in Industrial & Defense (I&D) markets is expected to bode well for the company's prospects in the to-be-reported quarter's results. In the fourth quarter, Industrial & Defense revenues rose about 7% sequentially to $115.6 million. Within this segment, GaN-based products used in radar and electronic warfare delivered more than 50% year-over-year growth. Defense programs are expected to have benefited from steady government spending, which is likely to have boded well for the company's prospects. MTSI expects I&D to deliver low single-digit sequential growth in the first quarter of fiscal 2026.

However, rising expenses, stemming from higher spending on research and development as the company continued to invest in new product qualifications and business expansion, are expected to have weighed on profitability in the to-be-reported quarter.

MACOM Technology Solutions Holdings, Inc. Price and EPS Surprise

MACOM Technology Solutions Holdings, Inc. price-eps-surprise | MACOM Technology Solutions Holdings, Inc. Quote

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