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Microchip Technology Raises Q3 Revenue Forecast on Strong Bookings and Market Recovery

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U.S. semiconductor maker Microchip Technology raised its forecast for third-quarter net sales on Monday, citing strong customer bookings and a broad-based recovery across end markets, sending its shares up 5.6% in after-hours trading.

The company said it now expects net sales of about $1.19 billion for the third quarter of fiscal 2026, exceeding its previous forecast range of $1.11 billion to $1.15 billion issued in November. In early December, Microchip had already indicated that sales were likely to come in at the upper end of that range.

Microchip has been benefiting from a gradual rebound in demand as customers work through excess semiconductor inventories accumulated during the pandemic, which had weighed heavily on orders in recent quarters.

“Our bookings activity was very strong in the December quarter despite a holiday-filled period,” Chief Executive Steve Sanghi said. He added that the company’s backlog for the March quarter started at a significantly higher level than the December quarter, signaling improved visibility for future demand.

The company also said it has made progress in reducing internal inventory levels, a move expected to lower inventory-related write-offs. At the same time, Microchip is preparing to ramp up factory production in the March quarter to reduce under-utilization charges as demand improves.

Microchip Technology is scheduled to report its fiscal third-quarter results on February 5.

Take-Two Projects Weak Q4 Bookings, Confirms Fall Launch for “GTA VI”

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Take-Two Interactive Software (TTWO.O) projected lower-than-expected fourth-quarter bookings on Thursday, attributing the decline to reduced in-game spending on mobile titles amid ongoing economic uncertainties and high inflation. The company expects bookings to fall between $1.48 billion and $1.58 billion, slightly under analysts’ average estimate of $1.54 billion, according to LSEG data.

The broader videogame industry has faced headwinds over the past two years, including layoffs, studio closures, and canceled projects, fueled by weak sales and higher borrowing costs. Take-Two’s mobile games like “Empires & Puzzles” performed below company expectations, reflecting a trend of consumers cutting back on mobile game spending.

Despite the short-term challenges, Take-Two’s stock rose over 6% in extended trading after the company confirmed that the highly anticipated “Grand Theft Auto VI” remains on track for a fall 2025 launch. The long-running action-adventure franchise is known for its immersive sandbox gameplay and dynamic characters, with each new installment being a major event in the gaming industry.

Wedbush Securities analyst Michael Pachter noted that confirmation of the launch date eased investor concerns about potential delays. Take-Two also reaffirmed expectations for higher net bookings in fiscal 2026 and 2027, driven by “GTA VI” and other major releases.

Beyond “GTA VI,” Take-Two is set to release several high-profile titles this year, including “Borderlands 4” and “Mafia: The Old Country.”

While the company’s third-quarter bookings of $1.37 billion fell short of the $1.39 billion consensus, Take-Two posted adjusted earnings of 72 cents per share, beating analysts’ expectations of 57 cents. The company also noted that Zynga, which it acquired in 2022, has nearly completed its integration into the Take-Two ecosystem and should contribute more significantly to profitability moving forward.

Roblox Shares Tank After Weak Forecast, Fueling Fears of Slowdown in Gaming

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Shares of Roblox (RBLX.N) plunged by 17% on Thursday after the gaming platform issued a weak forecast for its 2025 bookings, sparking concerns about a slowdown in its growth following years of rapid expansion. The company anticipates bookings to fall between $5.20 billion and $5.30 billion for the year, with the midpoint falling short of analysts’ expectations, which were pegged at $5.27 billion.

The forecast adds to the growing unease within the video game industry, which has been facing sluggish growth. Electronic Arts (EA.O) also recently reported weak bookings, primarily due to its underperforming soccer franchise. However, Roblox’s projected growth still points to a third consecutive year of approximately 20% growth in bookings, even as the broader gaming market struggles with weak consumer spending due to inflation.

Roblox’s Chief Financial Officer, Michael Guthrie, defended the company’s performance, noting that Roblox continues to grow at a rate significantly higher than the overall gaming industry, which grew by just 2.1% in 2024 according to Newzoo. The platform has thrived by expanding into new game genres, especially those targeting older players, and by unlocking new revenue streams through ads and e-commerce. Additionally, Roblox’s free-to-play model and its user-generated content have helped the platform weather the broader gaming slowdown.

Despite the weak forecast, Wedbush Securities analyst Michael Pachter dismissed the market’s reaction, calling it “unwarranted” and “irrational.” He maintained an “outperform” rating on Roblox stock, with a price target of $83, the highest on the street.

Roblox’s daily active users fell to 85.3 million in the fourth quarter, down from 88.9 million in the previous quarter. Bookings for the quarter were $1.36 billion, slightly missing analysts’ estimates of $1.37 billion. Guthrie attributed the weaker results to tough year-over-year comparisons, notably following the PlayStation launch, which drove a surge in new users and spending in the same period last year. He also pointed to the platform’s suspension in Turkey, where Roblox was banned due to safety and child abuse concerns, as another factor impacting growth.