Company Reports

Monolithic Power Systems is a disruptor in the power management chip market, using its proprietary process technology to differentiate from larger competitors. In our view, MPS differentiates from larger incumbents via its unique fabless model, with which it develops advanced manufacturing processes that integrate many functions on a single chip to offer a smaller form factor and greater energy efficiency to its customers. We believe revenue growth far above its largest competitors shows that its differentiated approach to power management is gaining traction in the market and that MPS is taking market share.

Monolithic Power Systems' second-quarter results were strong, and third-quarter guidance was even better. Sales rose 48% year over year to $981 million, and guidance calls for 56% year-over-year growth in September. Management raised its enterprise data growth guidance to 130% in 2026, up from 85%.

Monolithic Power Systems is a disruptor in the power management chip market, using its proprietary process technology to differentiate from larger competitors. In our view, MPS differentiates from larger incumbents via its unique fabless model, with which it develops advanced manufacturing processes that integrate many functions on a single chip to offer a smaller form factor and greater energy efficiency to its customers. We believe revenue growth far above its largest competitors shows that its differentiated approach to power management is gaining traction in the market and that MPS is taking market share.

Monolithic Power Systems reported strong first-quarter results and provided phenomenal second-quarter guidance. First-quarter sales rose 26% year over year to $804 million, and second-quarter guidance calls for 35% growth at the midpoint of $900 million, implying 12% sequential growth.

Monolithic Power Systems' fourth-quarter revenue beat the top end of management's guidance, and first-quarter guidance exceeded FactSet consensus expectations. Management guided to more than 50% enterprise data revenue growth in 2026, well above the prior range of 30%-40%.

Monolithic Power Systems is a disruptor in the power management chip market, using its proprietary process technology to differentiate from larger competitors. In our view, MPS differentiates from larger incumbents via its unique fabless model, with which it develops advanced manufacturing processes that integrate many functions on a single chip to offer a smaller form factor and greater energy efficiency to its customers. We believe revenue growth far above its largest competitors shows that its differentiated approach to power management is gaining traction in the market and that MPS is taking market share.

Monolithic Power Systems hosted us for a tour of its booth at the Consumer Electronics Show in Las Vegas this week. The firm exhibited many different chips and modules across the automotive, industrial, and data center verticals, with a focus on strong power regulation and efficient form factors.

Monolithic Power Systems' third-quarter revenue came in above guidance, rising 19% year over year to $737 million. Fourth-quarter guidance was positive, implying 19% year-over-year revenue growth to a midpoint of $740 million.

We think Monolithic Power Systems is a disruptor in the power management chip market, using its proprietary process technology to differentiate from larger competitors. In our view, MPS differentiates from larger incumbents via its unique fabless model, with which it develops advanced manufacturing processes that integrate many functions on a single chip to offer a smaller form factor and greater energy efficiency to its customers. We believe revenue growth far above its largest competitors shows that its differentiated approach to power management is gaining traction in the market and that MPS is taking market share.

Monolithic Power Systems' second-quarter results beat guidance, and management provided a strong third-quarter outlook. Revenue rose 31% year over year and 4% sequentially to $665 million. The midpoint of third-quarter guidance implies 16% year-over-year and 8% sequential growth.

We think Monolithic Power Systems is a disruptor in the power management chip market, using its proprietary process technology to differentiate from larger competitors. In our view, MPS differentiates from larger incumbents via its unique fabless model, with which it develops advanced manufacturing processes that integrate many functions on a single chip to offer a smaller form factor and greater energy efficiency to its customers. We believe revenue growth far above its largest competitors shows that its differentiated approach to power management is gaining traction in the market and that MPS is taking market share.

Monolithic Power Systems' first-quarter revenue came in at the top end of management guidance, rising 39% year over year and 3% sequentially to $638 million. Second-quarter guidance calls for further growth from these levels, to $650 million at the midpoint.

We think Monolithic Power Systems is a disruptor in the power management chip market, using its proprietary process technology to differentiate from larger competitors. In our view, MPS differentiates from larger incumbents via its unique fabless model, with which it develops advanced manufacturing processes that integrate many functions on a single chip to offer a smaller form factor and greater energy efficiency to its customers. We believe revenue growth far above its largest competitors shows that its differentiated approach to power management is gaining traction in the market and that MPS is taking market share.

Wide-moat Monolithic Power Systems laid out new guidance for the upcoming quarter and highlighted its diverse, enduring product portfolio during its 2025 investor day. The firm raised its first-quarter guidance, now expecting revenue in the range of $630 million-$640 million (previously $610 million-$640 million), GAAP operating expenses of $184.9 million-$190.9 million (previously $180.2 million-$186.2 million), and non-GAAP operating expenses of $131.6 million-$135.6 million (previously $126.9 million-$130.9 million). Management also discussed 2025-27 non-GAAP financial goals, with revenue targets largely unchanged at 10%-15% above market and gross margins in the range of 55%-60%. These goals are largely in line with our model. We continue to believe the firm’s ongoing innovation in integrated solutions and robust customer acquisition strategies set the foundation for a solid growth trajectory. We have lifted our near-term estimates per management guidance, but keep our long-term estimates intact. As a result, we increased our fair value estimate to $770 from $760. We now view shares as moderately undervalued.

Monolithic Power Systems' fourth-quarter sales rose 37% year over year to $622 million. Management expects a similar sales level in the March quarter, implying 35% year-over-year growth. The enterprise data segment rose 6% sequentially but was guided to decline in the March quarter.

We think Monolithic Power Systems is a disruptor in the power management chip market, using its proprietary process technology to differentiate from larger competitors. In our view, MPS differentiates from larger incumbents via its unique fabless model, with which it develops advanced manufacturing processes that integrate many functions on a single chip to offer a smaller form factor and greater energy efficiency to its customers. We believe revenue growth far above its largest competitors shows that its differentiated approach to power management is gaining traction in the market and that MPS is taking market share.

Many technology hardware stocks under our coverage plunged in Monday trading after reports of DeepSeek's R1 generative artificial intelligence model out of China offering performance parity to top US models at a much lower training cost. The iShares Semiconductor ETF was down 8% in midday trading.

We see shares of Monolithic Power Systems attractively undervalued following a selloff on Nov. 11. MPS shares have dropped 25% in one week after Edgewater Research published a note expecting severe share losses for MPS power management chips in Nvidia GPU systems. We believe the expectation for a massive loss in share was misinformed, and management has confirmed no reported performance issues and zero order cancellations from Nvidia. Shares have not recovered from the initial Nov. 11 selloff and currently imply a bear-case scenario for steep share losses, which we see as overly pessimistic.

We maintain our $700 fair value estimate for wide-moat Monolithic Power Systems after shares sold off as much as 20% in Nov. 11 trading. A report published by Edgewater Research on Nov. 11 claimed that MPS’ power management chips had lost significant placement in Nvidia’s B200 and GB200 GPU systems. We are skeptical of the report’s claims and maintain our existing forecast for MPS’ growth in data center and artificial intelligence applications.

We maintain our $700 fair value estimate for shares of wide-moat Monolithic Power Systems as we maintain our long-term growth thesis for the firm. MPS had a standout third quarter, with strong, broad-based growth across its end markets. At the same time, high-flying data center revenue growth decelerated in the quarter below our expectations. This deceleration doesn't worry us, given MPS' data-center sales remain at a high level, and that we believe there is more growth ahead. We believe this quarter shows MPS' admirable position across diverse end markets, across which we believe it is gaining market share. Shares sold off after hours on weaker AI revenue, but we continue to view the stock as moderately overvalued. We have rosy expectations for both AI and non-AI growth over the next 10 years for MPS, but we believe there remains some overexuberance priced into the stock at current levels.