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Valued at a market cap of $45.3 billion, Monolithic Power Systems, Inc. (MPWR) operates within the semiconductor industry. Specializing in high-performance analog and mixed-signal integrated circuits, the Kirkland, Washington-based company delivers advanced power solutions across various sectors, including industrial, automotive, and telecommunications.
Shares of this chipmaker have outperformed the broader market over the past 52 weeks. MPWR has notably risen 81.5% over this time frame, while the broader S&P 500 Index ($SPX) has gained 24.3%. In 2024, MPWR stock surged 47.5%, compared to SPX's 17.2% YTD gain.
Narrowing the focus, MPWR stock has also outpaced the S&P Semiconductor SPDR's (XSD) 12.2% rise over the past 52 weeks and a 5.4% increase on a YTD basis.
Monolithic Power Systems has outperformed due to its strong revenue growth driven by increasing demand for AI-related data center solutions, which has offset weaker performance in other business lines. Moreover, the stock recovered 1.4% following its Q2 earnings release on Aug. 1, reported earnings of $3.17 per share and revenue of $507.4 million, surpassing Wall Street forecasts. Additionally, the company’s optimistic Q3 revenue forecast, driven by robust demand for AI-related power control modules, reassured investors despite weaker performance in its automotive segment.
For the current fiscal year, ending in December, analysts expect MPWR's EPS to grow 18.6% year over year to $10.41 per share. The company's earnings surprise history is mixed. It beat the consensus estimates in two of the last four quarters while missing on two other occasions.
Among the 12 analysts covering the stock, the consensus rating is a “Strong Buy.” That’s based on nine “Strong Buy” ratings, two “Moderate Buys,” and one “Hold.”
On Aug. 21, TD Cowen raised Monolithic Power’s price target to $1,100 - Street-high price target and maintained a “Buy” rating, citing the company's early-stage growth potential and its strong positioning in data center processing power and diverse end markets as drivers of sustainable long-term growth. This implies a modest potential upside of 18.2% from the current price levels.
The mean price target of $951.30 represents a premium of only 2.2% to MPWR's current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
