Munger Mode rating: 2 out of 5 — Sell. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
Charlie and I have studied Microchip Technology with care. We see a competent business — sticky microcontroller designs, a thirty-five-year operating history, a sprawling 101,000-customer base, and a founder-CEO who was forced out of retirement to clean up a cycle that broke the company's prior leadership. We also see real defects: a leveraged 2018 acquisition of Microsemi that was timed near the prior cycle peak, a dilutive $1.485 billion 7.5% mandatory convertible preferred raised in March 2025 at the cycle trough — precisely the moment a great capital allocator would not be diluting common holders — and a current share price that has nearly doubled off the May 2025 low ($48.52) to flirt with all-time highs ($105.91 on May 8, 2026). The recovery is fully in the stock. The cycle is back. The moat is decent, not wonderful. We pass.
Recent filings analysed: 10-Q (2026-08-06), 8-K (2026-08-06), 8-K (2026-07-24), DEF 14A (2026-07-06).
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