Is Microchip Technology (MCHP) One of the Best Stocks to Buy to Beat the S&P 500?

May 9, 2026 - 03:11

Microchip Technology (MCHP) has posted a year-to-date return of 53.77% as of early May, placing it among the top contenders for investors looking to beat the broader S&P 500 index. The chipmaker recently gave a bullish forecast for the first quarter, with revenue projections coming in above Wall Street estimates.

According to a Reuters report from May 7, the company is seeing strong demand for its semiconductors used in industrial and automotive applications. This surge in orders suggests that the non-AI chip market is finally shaking off a prolonged slump. For years, Microchip focused on general-purpose microcontrollers and analog chips, which are essential for everything from factory equipment to car electronics. That focus is now paying off as these sectors rebound.

The stock's performance raises a key question for investors: can Microchip sustain this momentum? The company's guidance indicates that inventory levels are normalizing and customers are placing new orders after a period of destocking. If this trend holds, Microchip could continue to deliver solid earnings growth.

However, beating the S&P 500 over the long term is no small feat. The index has its own powerful tailwinds from tech giants and AI leaders. Microchip's advantage lies in its diversified customer base and essential product lines that are less volatile than consumer-focused chip stocks. For now, the company's strong quarterly outlook and robust year-to-date gains make it a stock worth watching for anyone trying to outperform the market.