AI Data Center Demand Lifts Microchip Sales 38%; Gen Digital Tops $1.33B

For investors, the first quarter of fiscal 2027 marks a clear inflection: Microchip's 38% revenue growth and 97.8% data-center surge confirm the AI capex cycle is translating into semiconductor bookings, while Gen Digital's 11% adjusted bookings growth and StepStone's record $2.8B private wealth subscriptions suggest durable end demand beyond mega-cap tech. The market is now pricing an inventory-normalized semis recovery and a broadening of AI monetization into consumer trust and private credit.

Microchip Technology's fiscal Q1 2027 earnings call anchored a cluster of late-2026 reports showing that the AI-driven semiconductor recovery is accelerating and broadening across adjacent software, cybersecurity, and private-market channels. Microchip reported net sales of $1.485 billion, up 13.2% sequentially and 38.0% year over year, with non-GAAP diluted EPS of $0.76 beating the midpoint of prior guidance by $0.07. Management attributed the outperformance to inventory normalization and improved distribution sell-through. Crucially, distribution inventory fell to 25 days—the lower end of the historical range—while on-balance-sheet inventory declined ten days sequentially to 175 days, still above the 130–150 day long-term target but a clear sign that the painful inventory correction is complete. Net debt declined by $170 million during the quarter to approximately $5.2 billion, with net debt-to-EBITDA at 2.85x.

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Siding & Trim net sales grew 34% total and 20% organically, North American fiber cement sell-through rose 9% with June accelerating to 19%, and management raised full-year revenue guidance to $5.564 billion to $5.723 billion.

The composition of Microchip's growth underscores how embedded the AI buildout has become across semiconductor categories beyond leading-edge GPUs. Data center end market revenue increased 97.8% year over year and reached 17.1% of total sales, driven by demand for AI infrastructure and cloud storage. Management disclosed that data center sales totaled $591 million in calendar year 2025 and are projected to grow 69% to approximately $1 billion in calendar year 2026. Industrial revenue, still the largest segment at 32.2% of sales, grew 24.3% year over year as distributor customers completed inventory corrections; aerospace and defense revenue rose 45.6%, automotive rose 29.3%, and communications rose 53.3% from a low base. This breadth distinguishes the current recovery from a narrow, single-end-market rally.

Across the rest of the cluster, the same themes appeared in software monetization and private capital formation. Doximity delivered Q1 revenue of $156.6 million, up 7% year over year, with adjusted EBITDA of $74.8 million and a 48% margin. Its AI Scribe users grew 10-fold in July, active workflow prescribers grew more than 30% to record highs, and nearly 50% of those providers used AI tools during the quarter. The company raised full-year revenue guidance to $671 million to $681 million. Non-GAAP gross margin fell from 91.2% to 87.5% because of higher AI compute spending—evidence that even capital-light software models face infrastructure costs as AI adoption scales.

Gen Digital continued its transformation into a consumer digital-trust platform. Non-GAAP revenue was $1.336 billion, up 11% adjusted for the prior year's extra fiscal week and including the MoneyLion stub period. Total bookings rose 11% adjusted, a fifth consecutive quarter of double-digit expansion. Paid customers reached 81 million, an 11th consecutive sequential increase. Cyber Safety revenue grew 4% adjusted on higher-tier Norton 360 memberships, while Trust-Based Solutions revenue increased 24% adjusted as identity and personal financial management products scaled. The Engine Marketplace reached a $500 million annual revenue run rate after adding 30 partners and expanding into insurance, and connected financial accounts grew from 75 million at the MoneyLion acquisition to 110 million.

StepStone Group's results highlighted a private-market fundraising acceleration tied to the same AI and cybersecurity themes. Fee-related earnings grew 30% to $106 million, fee revenue rose 27% to $271 million, and gross inflows were $10 billion for the quarter. Private wealth subscriptions hit a record $2.8 billion, total private wealth assets more than doubled year over year to $21 billion, and the SPRING fund raised $1.7 billion for venture and growth equity including AI and cybersecurity. StepStone added nearly $40 billion in gross AUM over the trailing twelve months, its best 12-month fundraising period ever, although a GAAP net loss of $116 million reflected a non-cash profits-interest buy-in adjustment.