We recently published a list of Aggressive Stock Portfolio: 12 Stocks Picked by Hedge Funds. In this article, we are going to take a look at where Monolithic Power Systems, Inc. (NASDAQ:MPWR) stands against other aggressive stocks picked by hedge funds.
The broader market has dropped into correction territory, declining by over 10% from its peak in February and wiping $5 trillion in market value. Simultaneously, Reuters reported that the Nasdaq Composite is also undergoing a correction, reflecting a wider pullback in high-growth stocks. With unpredictable market trends, aggressive stock portfolios offer both positive and negative effects for growth investors. Investor confidence is highly dependent on trade pressures and inflation, with the Federal Reserve holding rates at 4.25-4.5% and predicting inflation to rise to 2.8%. Concurrently, trade tensions between the U.S. and China are worsening, while in India, the outflow of capital has surged. An estimated $29 billion of foreign investment has been pulled out of stocks in India since October. It is the biggest outflow in six months due to global investment volatility.
History proves that these market corrections, while having repercussions, also create some opportunities. As mentioned in Reuters, since 1929, the broader market has gone through 56 corrections, but only 22 turned into bear markets. These dips typically last 115 days and fall by 13.8%, much less than the 35.6% drops in bear markets. Gold prices went up 13% in 2025, driven by investors looking for stability, and U.S. Treasury yields have fallen as demand for safe assets increases. However, aggressive investors know that market swings can be a good time to buy growth stocks poised for a comeback.
For high-growth investors, it is challenging to maneuver this volatile market. Corrections of 7-10% are occurring more frequently now, yet major indices still find support, which indicates that market disruptions could be investment opportunities. Companies with strong market control, advantages in U.S.-based manufacturing, or innovative business models might be more efficient in these economic conditions. Similarly, sectors evolving through new tech, population shifts, or regulation shifts could offer significant gains for those staying poised in short-term ups and downs.
Sector rotation is becoming crucial in these market shifts, as Reuters reported that the ‘Magnificent Seven’ tech giants are facing challenges. The major EV company has dropped 33%, and the group is down 17% on average since February. This has shifted investors’ interest toward undervalued sectors with strong potential. Historically, aggressive stocks bounce back stronger after corrections as investors regain their risk appetite. Despite current disruptions, companies with solid base values, exposure to disruptive tech, and apt market strategies could see considerable gains as markets settle down.
While uncertain market conditions persist, history shows that downturns often lead to significant recoveries. Investors who plan smartly during these shifts might see gains as money flows between markets and policies evolve.
Our Methodology
To compile our list of the Aggressive Stock Portfolio: 12 Stocks Picked by Hedge Funds, we began by screening stocks with a minimum of 20% revenue growth over the past three years and strong EPS performance. From this pool, we identified the top 12 stocks with the highest revenue growth and strong hedge fund interest. Finally, we ranked these stocks in ascending order based on hedge fund sentiment as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
An engineer examining a DC to DC integrated circuit board, looking for any flaws.
Monolithic Power Systems, Inc. (NASDAQ:MPWR)
3-Year Average Revenue Growth: 22.26%
Number of Hedge Fund Holders: 51
Monolithic Power Systems, Inc. (NASDAQ:MPWR) serves various sectors like computing, auto, data centers, and communications by designing and selling semiconductor-based power solutions. The company mainly focuses on DC-DC integrated circuits and power management systems used in cloud computing, storage, and vehicle applications.
In Q4 ended December 31, 2024, Monolithic Power Systems, Inc. (NASDAQ:MPWR) achieved record revenue of $621.7 million, an increase of 37% from last year. The company’s yearly revenue was $2.2 billion, growing 21% from 2023, which marks its thirteenth straight year of growth. This surge was driven by strong demand in the automotive, communications, and enterprise computing sectors. Moreover, data center demand bounced back, and cloud infrastructure expansion helped drive revenue gains. Monolithic’s full-year EPS rose to $36.59 from $8.76 in 2023, displaying better margins and efficient operations.
Monolithic Power Systems, Inc. (NASDAQ:MPWR) also focused on growing its product lineup in 2024. It launched a silicon carbide inverter for high-power uses, with first sales expected by the end of 2025. Additionally, the company also introduced car audio products, advanced battery management systems, and precise analog-to-digital converters thus positioning Monolithic for market growth.
For the future, Monolithic Power Systems, Inc. (NASDAQ:MPWR) predicts growth in both the automotive and communications sectors from delayed design wins and new product launches in 2025. Yet the enterprise data market might stay flat early in 2025 before advancing later in the year.
Overall, MPWR ranks 6th on our list of aggressive stocks picked by hedge funds. While we acknowledge the potential of MPWR, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than MPWR but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
