--- title: "Microchip named no customer for its new AI power board, and the stock trades at 116 times earnings" description: "Microchip and Navitas announced an 800V DC-to-6V rack-power reference design on October 5 and named no customer for it. The stock trades at 116.6x trailing earnings against a 27.2x five-year median; the report expected around October 29 decides whether that premium is earned." publisher: "The Inference" section: "Silicon" published: 2026-10-08T21:22:40.600Z modified: 2026-10-08T21:22:40.600Z canonical: https://theinference.org/article/microchip-named-no-customer-for-its-new-ai-power-board-and-the-stock-trades-at-116-times-earnings language: en keywords: "Microchip Technology, Navitas, Semiconductors, AI Hardware, Valuation" --- # Microchip named no customer for its new AI power board, and the stock trades at 116 times earnings > Microchip and Navitas announced an 800V DC-to-6V rack-power reference design on October 5 and named no customer for it. The stock trades at 116.6x trailing earnings against a 27.2x five-year median; the report expected around October 29 decides whether that premium is earned. ## An 800-volt board with nobody to bill [Microchip](https://theinference.org/markets/companies/microchip-technology)'s newest AI product is a circuit board, and the announcement names nobody who will buy it. The October 5 release with [Navitas](https://theinference.org/markets/companies/navitas-semiconductor) describes an [800V DC-to-6V reference design](https://www.globenewswire.com/fr/news-release/2026/10/05/3374545/0/en/navitas-and-microchip-collaborate-to-deliver-800v-reference-design-for-next-generation-ai-data-centers.html) for AI rack power: Microchip's dsPIC33AK digital controllers and TA100 security chip driving 16 Navitas GaN FETs, targeting up to 96% peak efficiency and 2,100 watts per cubic inch, aligned with the Open Compute Project's 800V DC standard [1]. The 20-kilowatt board reaches the OCP show floor in San Jose on October 12–15 [1][2]. What ships is a reference board, software and documentation: no customer, no socket, no revenue figure [1]. ## The AI line is one-sixth of the company Data center work was 17.1% of June-quarter sales, about $1 billion annualized for 2026 on the company's own telling, inside $1.485 billion of revenue, up 38% year on year [3]. CEO Steve Sanghi's clock runs later: PCIe Gen6 design wins bring "significant growth from data centers in 2027 and thereafter" [3]. The 38% is also a climb out of a hole, and revenue still sits about a third below its 2023 peak [4]. *Chart: **Five quarters of recovery, and revenue is still a third below its 2023 peak** Line chart of Microchip quarterly net sales from Q3 2023 to Q2 2026, falling from $2.25B to a $0.97B trough then recovering to $1.49B, still well below a reference line at the 2023 peak.* *Microchip quarterly net sales, US$ billions, calendar quarters, from its SEC filings. Reference line marks the Q3 2023 peak. [4]* ## The margin guide has scaffolding in it The September-quarter guide of 66–67% non-GAAP gross margin rests, as [the bear camp quoted by Simply Wall St](https://uk.finance.yahoo.com/news/microchip-technology-mchp-stock-looks-201034836.html) tells it, on a quarter of unusually strong 100%-margin licensing revenue and a one-time distributor inventory write-up, while foundry and assembly costs rise [5]. The company's own disclosure covers part of that ground: June's 63.8% non-GAAP gross margin was helped by a strong licensing quarter, and CFO Eric Bjornholt called some of that help non-recurring [3]. GuruFocus counts [$71.1 million of insider selling over 12 months](https://www.gurufocus.com/news/9114194/a-look-at-microchip-technology-inc-mchp-after-40-decline-gf-value-6729-vs-price-7802) with zero purchases, and its value line sits at $67.29 against a $78.02 price [6]. Twelve-month free cash flow of about $1.07 billion anchors the Simply Wall St discounted-cash-flow model, whose value sits modestly below the $81.26 quote it used [5]. ## What the buyers are paying for The recovery itself is real. Adjusted EPS nearly tripled from $0.27 a year ago to $0.76 [7], and [September-quarter guidance of $1.60 billion at the midpoint beat the $1.55 billion consensus](https://www.theglobeandmail.com/investing/markets/stocks/MCHP-Q/pressreleases/3746763/mchp-q2-deep-dive-data-center-and-aerospace-demand-drive-growth-margins-bolstered-by-mix-and-pricing/) [3]. The forward P/E is 21.5x, not the 116.6x trailing print against a 27.2x five-year median [6]. *Chart: **The trailing print is more than four times the five-year median** Bar chart comparing Microchip's 116.6x trailing P/E with its 27.2x five-year median and 21.5x forward P/E.* *Microchip price-to-earnings multiples as of October 7, 2026, per GuruFocus; forward figure on September-quarter consensus. [6]* Weiss reads the October 7 drop, 4.68% to $77.46 and roughly double the chip index's fall on a 5.35% 10-year Treasury yield, as macro risk-off rather than a Microchip event [7]. Navitas is buying the whole power chain: [the Claros close on October 6, a $232.8 million deal](https://www.marketscreener.com/news/navitas-closes-acquisition-of-claros-advancing-ai-infrastructure-with-grid-to-xpu-power-delivery-ce785dd9dc8bf322), is expected to more than double its 2030 market above $8 billion [8]. ## The referee works October 29 The report expected around October 29 carries [consensus near $0.93 adjusted EPS on $1.61 billion of revenue](https://weissratings.com/en/instant-news-alerts/microchip-technology-incorporated-mchp-down-4-7-time-to-sell-and-move-forward), inside the $0.91–0.95 guide [7]. The line to read is gross margin without the licensing quarter, with data center's share of sales as the second tell. Until that print, whoever buys the AI premium before a data-center revenue line of scale exists is the one paying for it; holders benefit only if October 29 shows the 66–67% guide is organic. San Jose puts the board on display on October 12. The margin line speaks on October 29. ## Takeaway Everything hangs on the October 29 print: whether the 66-67% gross margin guide is organic without the licensing quarter, and whether data center's share of sales keeps climbing before the AI premium is paid for. ## Sources 1. [GlobeNewswire, Navitas and Microchip Collaborate to Deliver 800V Reference Design for Next-Generation AI Data Centers, 5 October 2026](https://www.globenewswire.com/fr/news-release/2026/10/05/3374545/0/en/navitas-and-microchip-collaborate-to-deliver-800v-reference-design-for-next-generation-ai-data-centers.html) 2. [Stocktwits via Yahoo Finance, NVTS Stock In Spotlight Today Following Microchip Collaboration, 5 October 2026](https://finance.yahoo.com/technology/ai/articles/nvts-stock-spotlight-today-following-135645829.html) 3. [StockStory via The Globe and Mail, MCHP Q2 Deep Dive: Data Center and Aerospace Demand Drive Growth, Margins Bolstered by Mix and Pricing, 8 August 2026](https://www.theglobeandmail.com/investing/markets/stocks/MCHP-Q/pressreleases/3746763/mchp-q2-deep-dive-data-center-and-aerospace-demand-drive-growth-margins-bolstered-by-mix-and-pricing/) 4. [Microchip Technology, quarterly figures from its SEC filings, retrieved 8 October 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000827054) 5. [Simply Wall St via Yahoo Finance UK, Microchip Technology (MCHP) Stock Looks Fully Valued On Cash Flow, 7 October 2026](https://uk.finance.yahoo.com/news/microchip-technology-mchp-stock-looks-201034836.html) 6. [GuruFocus, A Look at Microchip Technology Inc (MCHP) After 4.0% Decline, GF Value $67.29 vs Price $78.02, 7 October 2026](https://www.gurufocus.com/news/9114194/a-look-at-microchip-technology-inc-mchp-after-40-decline-gf-value-6729-vs-price-7802) 7. [Weiss Ratings, Microchip Technology Incorporated (MCHP) Down 4.7%: Time to Sell and Move Forward?, 7 October 2026](https://weissratings.com/en/instant-news-alerts/microchip-technology-incorporated-mchp-down-4-7-time-to-sell-and-move-forward) 8. [GlobeNewswire via MarketScreener, Navitas Closes Acquisition of Claros, Advancing AI Infrastructure with Grid-to-xPU Power Delivery, 6 October 2026](https://www.marketscreener.com/news/navitas-closes-acquisition-of-claros-advancing-ai-infrastructure-with-grid-to-xpu-power-delivery-ce785dd9dc8bf322) --- Microchip named no customer for its new AI power board, and the stock trades at 116 times earnings — The Inference. Canonical: https://theinference.org/article/microchip-named-no-customer-for-its-new-ai-power-board-and-the-stock-trades-at-116-times-earnings