Goldman Sachs’ Stocks With Highest Consensus Returns: 42 Stocks With The Highest Consensus ROE

39. Monolithic Power Systems, Inc. (NASDAQ:MPWR)

Consensus ROE: 5%

Number of Hedge Fund Investors in Q2 2024: 35

Monolithic Power Systems, Inc. (NASDAQ:MPWR) is a specialty semiconductor company headquartered in Kirkland, Washington. The firm makes and sells power conversion, voltage control, and other associated chips. These products mean that Monolithic Power Systems, Inc. (NASDAQ:MPWR) is a key enabler of data centers that have seen robust investor attention during the AI era. As a result, its shares are up 91% over the past year and 55% year to date. The optimism surrounding Monolithic Power Systems, Inc. (NASDAQ:MPWR)’s stock is also rooted in its revenue as between 2020 and 2023, the firm has grown sales by a whopping 116% to $1.8 billion. In fact, the revenue growth has continued up until Monolithic Power Systems, Inc. (NASDAQ:MPWR) latest quarter, i.e., Q2 which saw the firm post revenue of $507.4 million for a 10.8% annual growth. Its enterprise data segment saw sales jump by 217% in Q1 and accounted for 33% of the revenue. However, a caveat remains in the form of an inventory glut. If demand for AI data centers slows down then Monolithic Power Systems, Inc. (NASDAQ:MPWR) might have to slow its volume shipments to let inventory stabilize.

ClearBridge Investments mentioned Monolithic Power Systems, Inc. (NASDAQ:MPWR) in its Q2 2024 investor letter. Here is what the fund said:

“Another top individual contributor was Monolithic Power Systems, Inc. (NASDAQ:MPWR), in the IT sector, which makes semiconductor-based power electronics for the computing and storage, automotive, industrial, communications and consumer markets. Continued demand for AI-related companies and beneficiaries and anticipation of greater demand for data center components such as power management hardware for CPUs helped drive strong performance in the quarter. We believe Monolithic is one of the most attractive semiconductor plays within the SMID universe and that the company will continue to gain share in analog semiconductors as it wins design contracts.”