The Inventory Reduction Ends, Bookings Explode: Microchip Technology Rides the Cycle and Focuses on Networking/Connectivity, High-Performance Computing, and AI at the Edge. Susquehanna Raises the Price Target to $90 (+20%)

Microchip Technology (MCHP) is transforming from a traditional supplier of simple microcontrollers (washing machines, cars) to an infrastructure provider for AI data centers. The new PCIe switches (Gen 6) are essential for managing the data surge between GPUs, CPUs, and memory. Additionally, Microchip is democratizing AI at the "Edge" (end devices): they enable AI models to run on standard microcontrollers without expensive specialized hardware, which is crucial for Industry 4.0 and robotics.  The revenue contribution from the AI infrastructure...