Monolithic Power Systems, Inc. (MPWR): A Bull Case Theory

We came across a bullish thesis on Monolithic Power Systems, Inc. (MPWR) on Substack by Hidden Market Gems. In this article, we will summarize the bulls’ thesis on MPWR. Monolithic Power Systems, Inc. (MPWR)’s share was trading at $582.99 as of March 12th. MPWR’s trailing and forward P/E were 15.93 and 34.48 respectively according to Yahoo Finance.

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Monolithic Power Systems (MPWR) has seen a significant decline in its stock price, currently trading at $577.82—down nearly 40% from its 52-week high of $959.64 reached in August 2024. Despite its strong fundamentals, the company has faced short-term headwinds that have pressured investor sentiment. A key factor in this downturn is MPWR’s recent earnings report, which, while surpassing expectations, provided a conservative revenue outlook with flat projected growth for the upcoming quarter. This cautious guidance has fueled concerns about the company’s near-term trajectory. Additionally, reports have surfaced that Nvidia may reduce its component orders from MPWR for its upcoming Blackwell platform due to alleged technical performance issues. Although MPWR’s management has denied any knowledge of such issues or order cancellations, the uncertainty has weighed on the stock. Broader weakness in the semiconductor sector has also played a role, with worries about a potential slowdown in chip demand and market rotation out of high-growth names further pressuring MPWR. While near-term volatility may persist, MPWR’s fundamental strength positions it well to weather market fluctuations, making its current valuation an attractive entry point for long-term investors.

Monolithic Power Systems, Inc. (MPWR) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 51 hedge fund portfolios held MPWR at the end of the fourth quarter which was 38 in the previous quarter. While we acknowledge the risk and potential of MPWR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. 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 the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.