Monolithic Power Systems, Inc. (MPWR), headquartered in Kirkland, Washington, designs, develops, markets, and sells semiconductor-based power electronics solutions for the storage and computing, automotive, enterprise data, consumer, communications, and industrial markets. With a market cap of $45.6 billion, the company offers power management ICs, isolated gate drivers, power modules, battery and chargers, load switches, inductors, analog input devices, sensors, motor drivers and controllers, and electronic components.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and MPWR perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the semiconductors industry. MPWR’s diversified portfolio spanning automotive, communications, and industrial markets helps mitigate risks. Its fabless model enables focus on semiconductor design, scalability, and flexibility, while minimizing capital expenditures.
Despite its notable strength, MPWR slipped 15.2% from its 52-week high of $1,123.38, achieved on Oct. 29. Over the past three months, MPWR stock has gained 12.3%, outperforming the Nasdaq Composite’s ($NASX) 8.3% gains during the same time frame.
In the longer term, shares of MPWR rose 37.1% on a six-month basis and climbed 63.8% over the past 52 weeks, outperforming NASX’s six-month gains of 20.8% and solid 19.1% returns over the last year.
To confirm the bullish trend, MPWR has been trading above its 200-day moving average since early June, with minor fluctuations. However, it has been trading below its 50-day moving average since mid-November.
MPWR's strong performance is driven by its AI-powered power-management business, with growth across the automotive, robotics, and enterprise data markets. The company's transformation from a chip supplier to a solutions provider is underway, with design wins in ADAS and battery management for robotics platforms. Despite challenges like short order cycles and pricing pressures, MPWR is investing in new technologies and expanding its global supply chain to drive future growth.
On Oct. 30, MPWR reported its Q3 results, and its shares closed down more than 7% in the following trading session. Its adjusted EPS of $4.73 exceeded Wall Street expectations of $4.62. The company’s revenue was $737.2 million, topping Wall Street's $721 million forecast. For Q4, MPWR expects revenue in the range of $730 million to $750 million.
MPWR’s rival, ON Semiconductor Corporation (ON), has lagged behind the stock. ON's shares plummeted 16.3% over the past 52 weeks but jumped 11.1% over the past six months.
Wall Street analysts are bullish on MPWR’s prospects. The stock has a consensus “Strong Buy” rating from the 16 analysts covering it, and the mean price target of $1,201 suggests a potential upside of 26.1% from current price levels.
On the date of publication, Neha Panjwani 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.
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