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Special Report
Monolithic Power Systems: AI Stock Beat, Raised and Upgraded Post-EarningsBy Leo Miller. Publication Date: 5/5/2026. 
Key Points
- Monolithic Power Systems has been a top-performing chip stock in 2026, and its latest financials show why.
- The company exceeded estimates across the board and greatly increased its AI growth expectations.
- Wall Street analysts issued large price target increases despite shares falling slightly.
- Special Report: Elon Musk: This Could Turn $100 into $100,000
Stocks like NVIDIA (NASDAQ: NVDA) and Broadcom (NASDAQ: AVGO) often dominate semiconductor headlines, but one lesser-known chip stock has outpaced them in recent returns. That stock is Monolithic Power Systems (NASDAQ: MPWR), which has surged more than 70% so far in 2026. By comparison, NVIDIA is up less than 10% this year, while Broadcom’s return is around 20%.
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Part of Monolithic’s strong performance reflects the growing importance of energy efficiency in data centers. GE Vernova (NYSE: GEV) is another stock benefiting from this trend, with shares up more than 60% in 2026. Monolithic makes power chips and modules that regulate energy use across systems, including AI equipment. Monolithic reported its latest financial results on April 30, and its share price fell roughly 2% the following trading day. Still, Wall Street analysts sharply raised price targets after the release, suggesting investors see additional opportunity. Monolithic’s Q1: 2 Beats and Stellar GuidanceIn Q1 2026, Monolithic posted revenue of $804 million, up 26% year over year (YOY). That beat expectations near $782 million (about 23% growth). Adjusted earnings per share (EPS) came in at $5.10, also up 26%, topping estimates of $4.90 (roughly 21% growth). But the guidance grabbed the most attention. For Q2 2026, Monolithic forecasts revenue of $900 million at the midpoint, implying 35%–36% growth — the firm's highest growth rate since Q1 2025. That far exceeded estimates near $817 million (about 23% growth). Monolithic did not provide explicit EPS guidance for the quarter. AI Drives Big Growth Across Two End MarketsResults were strong across most of Monolithic’s key end markets. Communications revenue increased 55.5% YOY, accounting for 13.9% of total sales. Enterprise Data — which includes power-management solutions for AI and server applications — jumped 97.7% YOY and has become the company’s largest end market, at 32.7% of total sales. Automotive rose 5.1% YOY, and Industrial grew 14.2% YOY, making up 18.9% and 6% of revenue, respectively. Storage and Computing declined 7.5% YOY, and Consumer fell 4.2% YOY, representing 21.7% and 6.8% of revenue. Overall, gains in the company’s strongest end markets more than offset declines elsewhere. No single end market accounted for more than one-third of sales, underscoring Monolithic’s diversification. AI demand appears to be the primary driver. For 2026, Monolithic now projects Enterprise Data sales will rise by at least 85% YOY — a substantial increase from its prior floor of 50%, which itself had been raised from earlier expectations of 30%–40%. Communications is also tied to AI. Revenue in that segment rose 33% compared with Q4 2025, driven by power solutions for optical modules and switches. Monolithic supplies modules for optical transceivers, a part of the AI networking ecosystem experiencing surging demand. When an analyst asked whether Communications revenue could grow as fast as, or faster than, Enterprise Data, CEO Michael R. Hsing replied, "Yes," though he provided no specific figures. The prospect of multiple end markets growing 85% or more in 2026 is encouraging. Analysts Boost Targets Big-Time After Monolithic’s ReportThe MarketBeat consensus price target on Monolithic sits near $1,600, implying limited upside from current levels. But price targets shifted materially after the earnings release. Among analysts that updated targets (and for which MarketBeat had prior data), the average target rose by 29% — a very significant move that contrasts with the modest sell-off in the stock. Looking at all price targets issued after the results, the average was roughly $1,793, a notable increase over the consensus and implying about 15% upside from recent prices. The company’s financial performance is impressive, but the stock is not cheap. Continued strong execution could leave room for further gains, yet a slowdown in demand or a lapse in execution could trigger a significant decline after such a rapid rally. |
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