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 $561.84 as of April 9^th. MPWR’s trailing and forward P/E were 15.36 and 33.44 respectively according to Yahoo Finance.

A technician looking at a circuit board of analog semiconductor products.

Markets are selling off not because fundamentals have cracked, but because of macro chaos — from trade threats to war and inflation. The AI trade was overbought, and now the correction is here. But amid the panic, quality names like Monolithic Power Systems (MPWR) are being pulled down with everything else, creating opportunity. MPWR has cooled off from its all-time highs, and with a forward P/E under 40, its valuation finally looks reasonable. This is a company with real strength: fabless operations that drive high margins, strong pricing power, and a diversified customer base that limits downside risk. Its indirect exposure to China is manageable, especially in this climate of rising economic nationalism. Most importantly, MPWR gives investors smart exposure to the AI theme — a way to play AI chip growth without chasing Nvidia at peak levels. In markets like this, the best moves are made early. When great companies are trading at discounts for reasons that have nothing to do with their long-term outlook, it’s not the time to wait — it’s the time to buy. MPWR fits that mold perfectly.

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.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

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