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Key Takeaways MPWR has gained 53.9% in a year, supported by rising demand for AI and cloud power solutions.Monolithic is gaining traction in AI servers, optical modules and networking applications.MPWR's 2026 and 2027 earnings estimates rose 32.4% and 37.2%, respectively, over the past year. Monolithic Power Systems, Inc. (MPWR - Free Report) has soared 53.9% in the past year compared with the industry’s growth of 38.5%. It has outperformed Microchip Technology Incorporated (MCHP - Free Report) but lagged MACOM Technology Solutions Holdings, Inc. (MTSI - Free Report) . While Microchip has gained 15.5%, MACOM surged 101.3% over this period.

One-Year MPWR Stock Price Performance

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MPWR Rides on AI MomentumMonolithic continues to differentiate itself through proprietary process technologies and high-power-density solutions. Unlike many fabless peers, the company installs proprietary process technologies within third-party manufacturing facilities, allowing tighter control over integration and product performance. Monolithic is benefiting from the rising demand for power management solutions tied to AI infrastructure and cloud computing deployments. The company continues to ramp both existing and new customers while increasing module adoption across server platforms.

MWPR is witnessing strong demand for its solutions in AI-related applications, particularly data centers and enterprise computing. Monolithic's Enterprise Data segment has been benefiting from robust spending on AI servers and networking infrastructure, which require increasingly sophisticated power management architectures. This has helped the company generate healthy top-line growth over the years.

As AI workloads become more power-intensive, the need for efficient power conversion solutions continues to rise. This trend is creating significant opportunities for MPWR, whose products help optimize energy efficiency and system performance in next-generation computing platforms. Management has highlighted growing traction in AI server power solutions, optical modules and networking applications, supported by a healthy pipeline of customer design wins.

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Portfolio Strength Lends SupportBeyond AI, Monolithic benefits from exposure to several long-term growth markets. The Automotive segment continues to gain from increasing semiconductor content in electric vehicles and advanced driver-assistance systems. Industrial applications, including factory automation and energy infrastructure, also represent attractive growth opportunities.

Monolithic has broadened its addressable market through targeted technology acquisitions and product portfolio expansion. The acquisition of Axign has strengthened the company's capabilities in programmable multicore digital signal processing and advanced audio applications. Axign's technology delivers near-zero distortion audio signals while reducing power consumption, making it attractive for automotive and consumer electronics markets where efficiency and performance are increasingly important.

The combination of Axign's audio processing and amplification technologies with Monolithic's power management expertise expands opportunities across automotive audio systems, residential applications, professional audio equipment, concert venues and stadium infrastructure. This helps the company reduce dependence on any single market and supports more resilient long-term growth.

Estimate Revision TrendEarnings estimates for MPWR for 2026 have moved up 32.4% to $27.11 over the past year, while the same for 2027 has increased 37.2% to $34.73. The positive estimate revision signals bullish sentiments about the stock’s growth potential.

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End NoteMonolithic is well-positioned to capitalize on the rapid expansion of AI infrastructure spending. Its leadership in power management solutions, growing exposure to AI servers, diversified end-market presence and strong execution provide a solid foundation for long-term growth.

Monolithic currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

With a favorable Zacks Rank and solid demand trends, Monolithic appears primed for healthy long-term growth. Consequently, investors are likely to profit in the long run if they bet on this stock now.

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, /PRNewswire/ -- Halper Sadeh LLC, an investor rights law firm, is investigating whether certain officers and directors of Monolithic Power Systems, Inc. (NASDAQ: MPWR) breached their fiduciary duties to shareholders.

If you currently own Monolithic stock and are a long-term shareholder, you may be able to seek corporate governance reforms, the return of funds back to the company, a court-approved financial incentive award, or other relief and benefits. Please click here to learn more about your legal rights and options or contact Daniel Sadeh or Zachary Halper at (212) 763-0060 or [email protected] or [email protected].

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Key Takeaways A recent pullback in MPWR shares reflects an opportunity rather than a breakdown. The company is seeing huge growth on the back of power management solutions for AI and server applications.Sales expectations are similarly trending higher, underpinning the favorable demand environment. Monolithic Power Systems (MPWR - Free Report) designs, develops, and markets high-performance power solutions. The company focuses on the market for high-performance analog and mixed-signal integrated circuits (ICs).

Its products are widely used in industrial applications, telecommunications infrastructure, cloud computing, and automotive and consumer applications. The stock is a current Zacks Rank #1 (Strong Buy), with EPS expectations remaining bullish across near-term timeframes.

Image Source: Zacks Investment Research

Monolithic Crushes EarningsMPWR’s latest set of results came in nicely above our expectations, posting a 10% beat relative to our consensus EPS estimate alongside an 8.5% sales beat. Sales grew by an impressive 48% YoY to a record $981 million, whereas earnings were up an even stronger 83% from the year-ago period.

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Importantly, the company is a beneficiary of the AI frenzy, providing power management chips that keep AI servers and data centers from overheating and crashing. The favorable trend was confirmed in its latest release, with Enterprise Data market revenue of $380.6 million in the above-mentioned period increasing 165% YoY, driven by higher sales of power management solutions for AI and server applications.

The result of its strong demand picture has led analysts to raise their sales expectations in a big way as well for both its current and next fiscal years, with the FY26 estimate up by nearly 30% just over the last year.

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The stock has cooled off recently, down roughly 15% over the last three months amid broader market volatility related to the AI trade. Shares did see a strong reaction to the latest quarterly release, and a bullish earnings picture helps keep the company’s bright outlook intact.

In addition, shares recently found some support near prior resistance and the 200-day moving average following the weak action across most of June, with the recent positive earnings reaction also a favorable sign concerning it regaining its near-term momentum. Price action aside, the company’s fundamental outlook remains rock-solid given the strong demand picture stemming from the AI frenzy, with the pullback over recent months more reflective of an opportunity than a breakdown.

Image Source: Zacks Investment Research

Bottom Line

Investors can implement a stellar strategy to find expected winners by taking advantage of the Zacks Rank – one of the most powerful market tools that provides a massive edge.

The top 5% of all stocks receive the highly coveted Zacks Rank #1 (Strong Buy). These stocks should outperform the market more than any other rank.

Monolithic Power Systems (MPWR - Free Report) would be an excellent stock for investors to consider, as displayed by its Zack Rank #1 (Strong Buy). 

Key Takeaways MPWR's Q2 revenues rose 47.6% and non-GAAP EPS climbed 54.4% as AI and server demand accelerated.Enterprise Data revenue surged 164.3% to $380.6 million, prompting MPWR to raise its 2026 growth floor.MPWR trades at 44.1X forward earnings, while near-term gross-margin expansion remains limited. Monolithic Power Systems, Inc. (MPWR - Free Report) is entering a higher earnings base as artificial intelligence (AI) and server demand lifts its data-center power business. Second-quarter 2026 revenues rose 47.6% year over year, while non-GAAP earnings increased 54.4% to $6.50 per share.

The question for investors is whether rapid growth, rising estimates and a broader product opportunity can offset a valuation that remains well above major benchmarks.

MPWR’s AI Growth Is Rewriting the Earnings BaseEnterprise Data revenue jumped 164.3% year over year to $380.6 million and represented 38.8% of second-quarter revenues. Existing and new customer ramps, greater module content, platform refreshes and central processing unit server demand supported the increase.

Management raised its 2026 Enterprise Data growth floor to 130% from 85%. Communications revenue also advanced 78.3%, reflecting higher sales of power solutions for optical modules and switches.

Image Source: Zacks Investment Research

Monolithic’s Estimate Revisions Keep Moving HigherThe Zacks Consensus Estimate calls for 2026 revenues of $4.084 billion and earnings of $27.11 per share. For 2027, the consensus stands at $5.156 billion in revenues and $34.73 per share in earnings.

The current-year earnings estimate has moved 16% higher over the past four weeks. Consensus earnings for 2026 also stand well above the $17.77 per share reported for 2025, with another increase projected for 2027.

Image Source: Zacks Investment Research

Image Source: Zacks Investment Research

MPWR’s Premium Multiple Raises the BarMPWR trades at 44.1X forward 12-month earnings, compared with 26.9X for its sub-industry, 21.3X for the broader technology sector and 20.7X for the S&P 500.

The current multiple is below MPWR’s five-year median of 55.8X but remains well above outside benchmarks. That premium places more emphasis on continued earnings expansion as investors assess the stock.

Image Source: Zacks Investment Research

Monolithic Faces Margin and Data Center RisksNon-GAAP gross margin was 55.6% in the second quarter and remains near the low end of management’s model. Third-quarter guidance of 55.4%-56% points to limited near-term margin expansion, while order visibility does not extend through 2027.

Enterprise Data’s 38.8% revenue share also increases exposure to AI and server spending cycles. Analog Devices, Inc. (ADI - Free Report) is also targeting AI data-center power delivery with analog and mixed-signal solutions. Microchip Technology Incorporated (MCHP - Free Report) competes across analog, power management, timing and memory products used in data-center applications.

MPWR’s Balance Sheet Supports the ExpansionCash, cash equivalents and short-term investments totaled $1.41 billion at June 30, 2026, while second-quarter operating cash flow was $227.9 million. That liquidity supports product development and capacity expansion.

MPWR has extended its capacity goal significantly beyond $6 billion. The company is expanding wafer supply and more complex module and system assembly while diversifying its global supply chain.

MPWR’s Bullish Signal Meets Weak Style ScoresMPWR’s earnings trajectory remains favorable, but the valuation makes the investment case less forgiving. The stock currently carries a Zacks Rank #1 (Strong Buy), reflecting favorable short-term earnings-estimate trends.

The Style Scores are less supportive. MPWR has a Value Score of F, Growth Score of D, Momentum Score of D and VGM Score of F. The combination is mixed rather than decisive because the Zacks Rank favors near-term estimate revisions, while the weak Style Scores do not provide the A or B confirmation that can strengthen a top-ranked stock selection.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Resources Investor Relations Journalists Agencies Client Login Send a Release News Products Contact , /PRNewswire/ -- Schubert Jonckheer & Kolbe LLP advises Monolithic Power Systems, Inc. (NASDAQ: MPWR) investors that the firm is investigating potential legal claims arising from alleged false and misleading statements about the quality and performance of the company's power management integrated circuits and its relationship with a key customer. Current shareholders are encouraged to contact the firm here: https://www.classactionlawyers.com/monolithic.

On May 6, 2026, U.S. District Judge James L. Robart ruled that key claims in a securities fraud lawsuit against Monolithic Power and its CEO and former CFO will move forward. The lawsuit alleges that between February and November 2024, the company misled investors by claiming it had resolved quality issues with its PMICs and that Nvidia continued to integrate those products into its next-generation systems. These statements allegedly caused Monolithic Power's stock to trade at artificially inflated prices. Judge Robart found the complaint sufficiently alleged that the false and misleading statements about these matters were made either with an intent to defraud or with deliberate recklessness. During this period, company insiders sold over $160 million in stock. When the truth was revealed between late October and early November 2024 that Nvidia had shifted business to competitors amid persistent product quality issues, the stock price fell 30%. We are investigating potential wrongdoing by Monolithic Power's directors and officers in connection with these allegations.

If you own Monolithic Power stock, you may have legal options. Visit https://www.classactionlawyers.com/monolithic to learn more.

About Schubert Jonckheer & Kolbe LLP

Schubert Jonckheer & Kolbe represents consumers in class actions and shareholders in derivative actions against corporate officers and directors. The firm is based in San Francisco and, with the help of co-counsel, litigates cases nationwide.

Contact
Dustin L. Schubert
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Tel: 415-788-4220

SOURCE Schubert Jonckheer & Kolbe LLP

HomeEarnings AnalysisTech 

SummaryMonolithic Power Systems is upgraded to Buy, with a new price target of $1,925, reflecting a significant Enterprise Data growth reset.Q2 revenue of $981M beat guidance by 8%, driven by broad-based power management adoption and strong Communications and Enterprise Data segment growth.MPWR is expanding TAM with >30% CPU server share, entry into building automation ($40B-$50B SAM), and new high-speed analog products.Valuation premium is justified by 48% YoY growth, 55.6% gross margin, and multiple SAM expansion vectors, though risks include execution, data center concentration, and China exposure. denisik11/iStock via Getty Images

Introduction Back in May 2026, we issued a Hold call for Monolithic Power Systems, Inc. (MPWR) after the Q1 earnings, with fair value near $1,570. Q2 has changed the setup, we think. Revenue of $981M landed roughly 8% above the

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Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Monolithic Power (MPWR - Free Report) is looking like an interesting pick from a technical perspective, as the company reached a key level of support. Recently, MPWR crossed above the 20-day moving average, suggesting a short-term bullish trend.

A well-liked tool among traders, the 20-day simple moving average offers a look back at a stock's price over a 20-day period. This is very beneficial to short-term traders, as it smooths out short-term price trends and gives more trend reversal signals than longer-term moving averages.

The 20-day moving average can show signals that are similar to other SMAs as well. If a stock's price is moving above the 20-day, the trend is considered positive. When the price falls below the moving average, it can signal a downward trend.

MPWR has rallied 10.7% over the past four weeks, and the company is a Zacks Rank #2 (Buy) at the moment. This combination suggests MPWR could be on the verge of another move higher.

The bullish case solidifies once investors consider MPWR's positive earnings estimate revisions. No estimate has gone lower in the past two months for the current fiscal year, compared to 1 higher, while the consensus estimate has increased too.

With a winning combination of earnings estimate revisions and hitting a key technical level, investors should keep their eye on MPWR for more gains in the near future.

Monolithic Power Systems (MPWR), a semiconductor company providing power-management products, jumped approximately 9.1% in Friday's regular-session trading as o

Key Takeaways MPWR beat Q2 estimates as revenue rose 47.6% and non-GAAP EPS climbed 54.4%.Enterprise Data revenue surged 164.3% on stronger demand for AI and server power solutions.MPWR raised its 2026 Enterprise Data growth floor to 130% and guided Q3 sales to $1.14-$1.16B. Monolithic Power Systems, Inc. (MPWR - Free Report) reported second-quarter 2026 non-GAAP earnings of $6.50 per share, up 54.4% year over year and 10.5% above the Zacks Consensus Estimate. Revenues rose 47.6% to $980.6 million, beating the consensus mark by 8.5%.

Record sales reflected broad-based ordering, led by power solutions for AI and server applications. Enterprise Data revenue surged 164.3%, while the company shipped products for more than 1,500 new automotive sockets in the first half.

Profitability ExpandsGAAP net income climbed 90.6% to $257.3 million, or $5.22 per share, from $135.0 million, or $2.81 per share, a year earlier. Non-GAAP net income advanced 58.3% to $320.1 million. GAAP operating income rose to $303.9 million from $164.8 million.

Non-GAAP gross margin was 55.6%, up 10 basis points (bps) year over year. Non-GAAP operating expenses increased 29.1% to $177.6 million, but strong revenue growth lifted the non-GAAP operating margin 270 bps to 37.5%.

End Markets AdvanceEnterprise Data revenues reached $380.6 million and represented 38.8% of total sales. Growth reflected higher demand for power management solutions serving AI and server applications, with existing customers, new customers, higher module content and platform refreshes supporting the increase.

Storage and Computing sales rose 2.3% to $199.8 million. Automotive revenues grew 8.2% to $157.1 million, aided by higher sales of infotainment and advanced driver-assistance system power solutions.

Communications Momentum AcceleratesCommunications revenues jumped 78.3% to $131.5 million. Optical modules remained the larger contributor, while switches, data processing units and network interface cards also supported growth.

Industrial sales increased 17.3% to $54.8 million. Consumer revenues declined 4.8% to $56.8 million, making it the only end market to contract year over year, although all six end markets improved sequentially.

MPWR Broadens Product ReachThe company extended its capacity target significantly beyond $6 billion to support future growth and its transition from a chip supplier to a full solutions provider. Expansion covers both wafer supply and the more complex back-end assembly needed for modules and systems.

The broader supply plan is designed to remain geographically balanced and adapt to customer requirements. Monolithic Power also received initial orders for high-speed DDR5 memory components and began sampling high-voltage AC-to-DC products for 800-volt data center architectures. The DDR5 effort is expected to expand the company's served market into next year.

Enterprise Data Growth Floor RaisedManagement increased its 2026 Enterprise Data growth floor to 130% from 85%. Channel inventory remained very low, and book-to-bill was again well above one, providing more than one quarter of visibility.

CPU server power remained a growth driver, with the company broadly positioned across x86 and ARM platforms. Management also sees further communications opportunities from both market expansion and additional share gains in optical and switching applications.

Liquidity Remains SolidCash, cash equivalents and short-term investments totaled $1.41 billion at quarter-end, up from $1.37 billion at the end of the first quarter. Operating cash flow was $227.9 million, down from $250.3 million in the preceding quarter.

Inventories rose to $675.8 million from $619.2 million, but days of inventory based on current-quarter revenue declined to 140 from 157. The board authorized an additional $500 million for share repurchases, bringing the current authorization to $1 billion.

OutlookFor the third quarter of 2026, the company expects revenues of $1.14-$1.16 billion. Non-GAAP gross margin is projected between 55.4% and 56%, while non-GAAP operating expenses are expected in the range of $201.2-$205.2 million.

Zacks RankMonolithic Power currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming ReleasesArista Networks Inc. (ANET - Free Report) is scheduled to release second-quarter 2026 earnings on Aug. 4. The Zacks Consensus Estimate for earnings is pegged at 89 cents per share, suggesting a growth of 21.9% from the year-ago reported figure.

Arista has a long-term earnings growth expectation of 19.9%. Arista delivered an average earnings surprise of 8.3% in the last four reported quarters.

Akamai Technologies, Inc. (AKAM - Free Report) is slated to release second-quarter 2026 earnings on Aug. 6. The Zacks Consensus Estimate for earnings is pegged at $1.58 per share, indicating an 8.7% decline from the year-ago reported figure.

Akamai has a long-term earnings growth expectation of 8.1%. Akamai delivered an average earnings surprise of 7.5% in the last four reported quarters.

Pinterest, Inc. (PINS - Free Report) is set to release second-quarter 2026 earnings on Aug. 4. The Zacks Consensus Estimate for earnings is pegged at 36 cents per share, implying a rise of 9.1% from the year-ago reported figure.

Pinterest has a long-term earnings growth expectation of 27%. Pinterest delivered an average negative earnings surprise of 4.1% in the last four reported quarters.

Monolithic Power reported quarterly earnings of $6.50 per share which beat the analyst consensus estimate of $5.87 per share. The company reported quarterly sales of $980.642 million which beat the analyst consensus estimate of $902.496 million.

Monolithic Power said it sees third-quarter sales of $1.140 billion-$1.160 billion, versus market estimates of $981.875 million.

“Our results demonstrate the strength of our diversified model and our continued success in transforming from a chip-only, semiconductor supplier to a full service solutions provider,” said Michael Hsing, CEO and founder of MPS.

Monolithic Power shares gained 11.3% to $1,465.50 in pre-market trading.

These analysts made changes to their price targets on Monolithic Power following earnings announcement.

Needham analyst N. Quinn Bolton maintained the stock with a Buy and raised the price target from $1,750 to $2,000. Keybanc analyst John Vinh maintained the stock with an Overweight rating and boosted the price target from $2,000 to $2,100. Considering buying MPWR stock? Here’s what analysts think:

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Monolithic Power (MPWR - Free Report) came out with quarterly earnings of $6.5 per share, beating the Zacks Consensus Estimate of $5.88 per share. This compares to earnings of $4.21 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of +10.54%. A quarter ago, it was expected that this chipmaker would post earnings of $4.89 per share when it actually produced earnings of $5.1, delivering a surprise of +4.29%.

Over the last four quarters, the company has surpassed consensus EPS estimates four times.

Monolithic, which belongs to the Zacks Semiconductor - Analog and Mixed industry, posted revenues of $980.64 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 8.48%. This compares to year-ago revenues of $664.57 million. The company has topped consensus revenue estimates four times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Monolithic shares have added about 37.8% since the beginning of the year versus the S&P 500's gain of 6.9%.

What's Next for Monolithic?While Monolithic has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Monolithic was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $6.45 on $976.91 million in revenues for the coming quarter and $24.18 on $3.71 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Semiconductor - Analog and Mixed is currently in the top 10% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Another stock from the same industry, Semtech (SMTC - Free Report) , has yet to report results for the quarter ended July 2026.

This chipmaker is expected to post quarterly earnings of $0.62 per share in its upcoming report, which represents a year-over-year change of +51.2%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

Semtech's revenues are expected to be $328.37 million, up 27.5% from the year-ago quarter.

SCHAFFHAUSEN, Switzerland, July 30, 2026 (GLOBE NEWSWIRE) -- Monolithic Power Systems, Inc. (“MPS”) reported its results after market close on July 30, 2026 and will host a question-and-answer webinar at 2:00 p.m. PT / 5:00 p.m. ET. The webinar can be accessed from the Investor Relations section of the MPS website at www.monolithicpower.com.

Q2 2026 Financial Summary(Unaudited)   GAAP           Q2'26 Q1'26 Q2'25 QoQ Change YoY ChangeRevenue ($M)$980.6  $804.2  $664.6  21.9% 47.6%Gross Margin 55.2%  55.3%  55.1% (0.1) pts 0.1 ptsOpex ($M)$237.2  $203.9  $201.3  16.3% 17.8%Operating Margin 31.0%  30.0%  24.8% 1.0 pts 6.2 ptsNet income ($M)$257.3  $193.2  $135.0  33.2% 90.6%Diluted EPS$5.22  $3.92  $2.81  33.2% 85.8%                   Non-GAAP           Q2'26 Q1'26 Q2'25 QoQ Change YoY ChangeRevenue ($M)$980.6  $804.2  $664.6  21.9% 47.6%Gross Margin 55.6%  55.5%  55.5% 0.1 pts 0.1 ptsOpex ($M)$177.6  $158.3  $137.6  12.1% 29.1%Operating Margin 37.5%  35.8%  34.8% 1.7 pts 2.7 ptsNet income ($M)$320.1  $251.3  $202.2  27.4% 58.3%Diluted EPS$6.50  $5.10  $4.21  27.5% 54.4%Tax Rate 15.0%  15.0%  15.0% Flat Flat                 Revenue by End Market                 Revenue % Change % of RevenueEnd Market ($M) Q2'26 Q1'26 Q2'25 QoQ YoY  Q2'26 Q1'26Enterprise Data $380.6 $262.8 $144.0 44.8% 164.3% 38.8% 32.7%Storage & Computing  199.8  174.4  195.3 14.6% 2.3% 20.4  21.7 Automotive  157.1  152.4  145.1 3.1% 8.2% 16.0  18.9 Communications  131.5  111.5  73.8 18.0% 78.3% 13.4  13.9 Consumer  56.8  54.5  59.7 4.2% (4.8%) 5.8  6.8 Industrial  54.8  48.6  46.7 12.7% 17.3% 5.6  6.0 Total $980.6 $804.2 $664.6 21.9% 47.6% 100% 100%                       Ongoing Business Conditions

In the second quarter of 2026, MPS achieved record quarterly revenue of $980.6 million, 21.9% higher than the first quarter of 2026 and 47.6% higher than revenue in the second quarter of 2025.

Our quarterly performance was the result of our continued innovation, our consistent execution and the resilience of our diversified market and supply chain strategy.

Q2 2026 highlights include:

All end markets grew sequentially with Enterprise Data growing 45% as we continued to see strong, broad-based ordering patterns.
We extended our capacity goal significantly beyond $6B to support future revenue growth and our transformation into a full solution provider.
We received initial orders for high-speed DDR5 memory components which we expect to grow our SAM into next year.
We began sampling High Voltage AC to DC products for 800V data center architectures as we expand beyond our current AI and server core power solutions.
In our Automotive market, so far this year, we have shipped products for over 1500 new sockets as we increase our footprint in both ADAS and other applications within the vehicle.
We continue to adjust to the fluid geopolitical and macro-economic environment, but our diversified market strategy remains unchanged:

MPS focuses on innovation and solving our customers’ most challenging problems.We consistently invest in new technologies that open new end markets and applications.We continuously expand and diversify our global supply chain allowing us to capture future growth opportunities, maintain supply stability, and rapidly adapt to market changes as they occur.
“Our results demonstrate the strength of our diversified model and our continued success in transforming from a chip-only, semiconductor supplier to a full service solutions provider,” said Michael Hsing, CEO and founder of MPS.

Q2 2026 Revenue Results

MPS reported second quarter revenue of $980.6 million, 21.9% higher than the first quarter of 2026 and 47.6% higher than revenue in the second quarter of 2025. Compared with the first quarter of 2026, sales improved sequentially across all end markets.

In our Enterprise Data market, second quarter 2026 revenue of $380.6 million increased 44.8% from the first quarter of 2026. The sequential increase was driven by higher sales of our power management solutions for AI and server applications. Second quarter 2026 Enterprise Data revenue was up 164.3% year over year. Enterprise Data revenue represented 38.8% of our total second quarter 2026 revenue compared with 32.7% in the first quarter of 2026.

Second quarter 2026 Communications revenue of $131.5 million was up 18.0% from the first quarter of 2026 primarily as a result of higher sales of power solutions for optical modules and switches. Second quarter 2026 Communications revenue was up 78.3% year over year. Communications sales represented 13.4% of our total second quarter 2026 revenue compared with 13.9% the first quarter of 2026.

Second quarter 2026 Storage and Computing revenue of $199.8 million increased 14.6% from the first quarter of 2026 on higher sales for memory and storage power management solutions. Second quarter 2026 Storage and Computing revenue was up 2.3% year over year. Storage and Computing revenue represented 20.4% of MPS’s second quarter 2026 revenue compared with 21.7% in the first quarter of 2026.

Second quarter 2026 Industrial revenue of $54.8 million increased 12.7% from the first quarter of 2026. Second quarter 2026 Industrial revenue was up 17.3% year over year. Industrial revenue represented 5.6% of our total second quarter 2026 revenue compared with 6.0% in the first quarter of 2026.

Second quarter 2026 Consumer revenue of $56.8 million increased 4.2% from the first quarter of 2026. Second quarter 2026 Consumer revenue was down 4.8% year over year. Consumer revenue represented 5.8% of our total second quarter 2026 revenue compared with 6.8% in the first quarter of 2026.

Second quarter Automotive revenue of $157.1 million increased 3.1% from the first quarter of 2026 primarily from higher sales of Infotainment and ADAS power solutions. Second quarter 2026 Automotive revenue was up 8.2% year over year. Automotive revenue represented 16.0% of our second quarter 2026 revenue compared with 18.9% in the first quarter of 2026.

Q2 2026 Gross Margin & Operating Income

GAAP gross margin was 55.2%, 0.1 percentage points lower than the first quarter of 2026. Our GAAP operating income was $303.9 million compared to $241.2 million reported in the first quarter of 2026.

Non-GAAP gross margin for the second quarter of 2026 was 55.6%, 0.1 percentage points higher than the first quarter of 2026. Our non-GAAP operating income was $367.7 million compared to $288.0 million reported in the first quarter of 2026.

Q2 2026 Operating Expenses

GAAP operating expenses were $237.2 million in the second quarter of 2026 compared with $203.9 million in the first quarter of 2026. Non-GAAP operating expenses were $177.6 million, up from $158.3 million in the first quarter of 2026.

The differences between non-GAAP operating expenses and GAAP operating expenses for the quarters discussed here are primarily stock-based compensation and related expenses and deferred compensation plan expense.

Total stock-based compensation and related expenses, including approximately $1.8 million charged to cost of goods sold, was $53.5 million in the second quarter of 2026 compared with $48.5 million in the first quarter of 2026.

The Bottom Line

Second quarter 2026 GAAP net income was $257.3 million or $5.22 per fully diluted share, compared with $193.2 million or $3.92 per fully diluted share in the first quarter of 2026.

Second quarter 2026 non-GAAP net income was $320.1 million or $6.50 per fully diluted share, compared with $251.3 million or $5.10 per fully diluted share in the first quarter of 2026.

Second quarter 2026 non-GAAP tax rate of 15% was flat to the first quarter of 2026.

There were 49.3 million fully diluted shares outstanding at the end of the second quarter of 2026.

Balance Sheet and Cash Flow

Cash, cash equivalents and short-term investments were $1,413.8 million at the end of the second quarter of 2026 compared to $1,367.1 million at the end of the first quarter of 2026. For the second quarter of 2026, MPS generated operating cash flow of $227.9 million compared with first quarter of 2026 operating cash flow of $250.3 million.

Accounts receivable at the end of the second quarter of 2026 were $343.6 million, representing 32 days of sales outstanding, which was 2 days lower than the 34 days reported at the end of the first quarter of 2026.

Our internal inventories at the end of the second quarter of 2026 were $675.8 million, up from $619.2 million at the end of the first quarter of 2026. Days of inventory of 140 days at the end of the second quarter of 2026 was 17 days lower than at the end of the first quarter of 2026.

Comparing current inventory levels using next quarter’s projected revenue, days of inventory at the end of the second quarter of 121 days was 7 days lower than at the end of the first quarter of 2026.

Selected Balance Sheet and Inventory Data(Unaudited)       Q2'26 Q1'26 Q2'25Cash, Cash Equivalents, and Short-Term Investments$ 1,413.8 M $ 1,367.1 M $ 1,146.1 MOperating Cash Flow$ 227.9 M $ 250.3 M $ 237.6 MAccounts Receivable$ 343.6 M $ 302.1 M $ 194.8 MDays of Sales Outstanding32 Days 34 Days 27 DaysInternal Inventories$ 675.8 M $ 619.2 M $ 490.6 MDays of Inventory (current quarter revenue)140 Days 157 Days 150 DaysDays of Inventory (next quarter revenue)121 Days 128 Days 135 Days       Q3 2026 Business Outlook

For the third quarter of 2026 ending September 30, we are forecasting:

Revenue in the range of $1,140 million to $1,160 million.GAAP gross margin in the range of 55.2% to 55.8%.Non-GAAP gross margin in the range of 55.4% to 56.0%, which excludes the impact from stock-based compensation and related expenses as well as the impact from amortization of acquisition-related intangible assets.Total stock-based compensation and related expenses in the range of $53.2 million to $55.2 million including approximately $1.7 million that would be charged to cost of goods sold.GAAP operating expenses between $252.7 million and $258.7 million.Non-GAAP operating expenses in the range of $201.2 million to $205.2 million. This estimate excludes stock-based compensation and related expenses in the range of $51.5 million to $53.5 million.Interest and other income in the range from $7.8 million to $8.2 million before foreign exchange gains or losses.Non-GAAP tax rate of 15% for 2026.Fully diluted shares outstanding in the range of 49.1 to 49.5 million shares.
In addition, our Board of Directors has authorized an additional $500 million for stock repurchases bringing our total current authorization to $1 billion.

For further information, contact:

Tony Balow
Vice President, Finance
Monolithic Power Systems, Inc.
[email protected]

Safe Harbor Statement

This earnings commentary contains, and statements that will be made during the accompanying webinar will contain, forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, that should not be unduly relied upon, including under the “Q3 2026 Business Outlook” section herein, our statement regarding our business focus, our statement regarding our capacity growth goal, our statement regarding our expected shipments for the Automotive end market, our statement regarding our expected expansion of our SAM for high-speed DDR5 memory components, our statement regarding the expansion and diversification of our supply chain to allow us to capture future growth opportunities, maintain supply stability and swiftly adapt to market changes as they occur, and our statement regarding the major customer sampling of our first high speed interface products for DDR5, including, among other things, (i) projected revenue, GAAP and non-GAAP gross margin, GAAP and non-GAAP operating expenses, stock-based compensation and related expenses, amortization of acquisition-related intangible assets, other income before foreign exchange gains or losses, and fully diluted shares outstanding, (ii) our outlook for the third quarter of fiscal year 2026 and the near-term, medium-term and long-term prospects of MPS, including our ability to adapt to changing market conditions, performance against our business plan, our ability to grow despite the various challenges facing our business, our industry and the global economic environment, potential new business segments, our continued investment in research and development (“R&D”), expected revenue growth, customers’ acceptance of our new product offerings, the prospects of our new product development, our expectations regarding market and industry trends and prospects, and our goal to expand our capacity and the impact it may have on our business, (iii) our ability to penetrate new markets and expand our market share, (iv) our ability to reduce our expenses, and (vi) statements regarding the assumptions underlying or relating to any statement described above. These forward-looking statements are not historical facts or guarantees of future performance or events, are based on current expectations, estimates, beliefs, assumptions, goals, and objectives, and involve significant known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from the results expressed by these statements. Readers of this earnings commentary and listeners to the accompanying conference call are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. Factors that could cause actual results to differ include, but are not limited to, continued uncertainties in the global economy, including due to current and potential global conflicts, global tariffs, export controls and retaliatory measures and announcements regarding same, inflation, consumer sentiment and other factors; adverse events arising from orders or regulations of governmental entities, including such orders or regulations that impact our customers or suppliers, and adoption of new or amended accounting standards; adverse changes in laws and government regulations such as tariffs on imports of foreign goods, export regulations and export classifications, and tax laws or the interpretation of same, including in foreign countries where MPS has offices or operations; the effect of export controls, trade and economic sanctions regulations and other regulatory or contractual limitations on our ability to sell or develop our products in certain foreign markets, particularly in China; our ability to obtain governmental licenses and approvals for international trading activities or technology transfers, including export licenses; acceptance of, or demand for, our products, in particular the new products launched recently, being different than expected; our ability to increase market share in our targeted markets; difficulty in predicting or budgeting for future customer demand and channel inventories, expenses and financial contingencies (including as a result of any impact from current and potential global conflicts); our ability to efficiently and effectively develop new products and receive a return on our R&D expense investment; our ability to attract new customers and retain existing customers; our ability to meet customer demand for our products due to constraints on our third-party suppliers’ ability to manufacture sufficient quantities of our products or otherwise; our ability to expand manufacturing capacity to support future growth; adverse changes in production and testing efficiency of our products; any political, cultural, military, regulatory, economic, foreign exchange and operational changes in China, where a significant portion of our manufacturing capacity comes from; any market disruptions or interruptions in our schedule of new product development releases; our ability to manage our inventory levels; adequate supply of our products from our third-party manufacturing partners; adverse changes or developments in the semiconductor industry generally, which is cyclical in nature, and our ability to adjust our operations to address such changes or developments; the ongoing consolidation of companies in the semiconductor industry; competition generally and the increasingly competitive nature of our industry; our ability to realize the anticipated benefits of companies and products that MPS acquires, and our ability to effectively and efficiently integrate these acquired companies and products into our operations; the risks, uncertainties and costs of litigation in which MPS is involved; the outcome of any upcoming trials, hearings, motions and appeals; the adverse impact on our financial performance if its tax and litigation provisions are inadequate; our ability to effectively manage our growth and attract and retain qualified personnel; the effect of epidemics and pandemics on the global economy and on our business; the risks associated with the financial market, economy, global tariffs, export controls and retaliatory measures and announcements regarding same, and geopolitical uncertainties, including current and potential global conflicts; the Company’s ability to timely and adequately remediate its material weakness; and other important risk factors identified under the caption “Risk Factors” and elsewhere in our Securities and Exchange Commission (“SEC”) filings, including, but not limited to, our Annual Report on Form 10-K filed with the SEC on February 27, 2026. MPS assumes no obligation to update the information in this earnings commentary or in the accompanying webinar.

Non-GAAP Financial Measures

This earnings commentary contains references to certain non-GAAP financial measures. Non-GAAP net income, non-GAAP net income per share, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP other income, net, and non-GAAP income before income taxes differ from net income, net income per share, gross margin, operating expenses, operating income, other income, net, and income before income taxes determined in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). Non-GAAP net income and non-GAAP net income per share exclude the effect of stock-based compensation and related expenses, which include stock-based compensation expense and employer payroll taxes in relation to the stock-based compensation, amortization of acquisition-related intangible assets, net deferred compensation plan expense, and related tax effects. Non-GAAP gross margin excludes the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and deferred compensation plan expense. Non-GAAP operating expenses exclude the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and deferred compensation plan expense. Non-GAAP operating income excludes the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and deferred compensation plan expense. Non-GAAP other income, net excludes the effect of deferred compensation plan income. Non-GAAP income before income taxes excludes the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and net deferred compensation plan expense. Projected non-GAAP gross margin excludes the effect of stock-based compensation and related expenses, and amortization of acquisition-related intangible assets. Projected non-GAAP operating expenses exclude the effect of stock-based compensation and related expenses. These non-GAAP financial measures are not prepared in accordance with GAAP and should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. MPS utilizes both GAAP and non-GAAP financial measures to assess what it believes to be its core operating performance and to evaluate and manage its internal business and assist in making financial operating decisions. MPS believes that the inclusion of non-GAAP financial measures, together with GAAP measures, provides investors with an alternative presentation useful to investors’ understanding of MPS’s core operating results and trends. Additionally, MPS believes that the inclusion of non-GAAP measures, together with GAAP measures, provides investors with an additional dimension of comparability to similar companies. However, investors should be aware that non-GAAP financial measures utilized by other companies are not likely to be comparable in most cases to the non-GAAP financial measures used by MPS. See the GAAP to Non-GAAP reconciliations in the tables set forth below.

About Monolithic Power Systems

MPS is a fabless global company that provides high-performance, semiconductor-based power electronics solutions. MPS’s mission is to reduce energy and material consumption to improve all aspects of quality of life and create a sustainable future. Founded in 1997 by our CEO Michael Hsing, MPS has three core strengths: deep system-level knowledge, strong semiconductor design expertise, and innovative proprietary technologies in the areas of semiconductor processes, system integration, and packaging. These combined advantages enable MPS to deliver reliable, compact, and monolithic solutions that are highly energy-efficient, cost-effective, and environmentally responsible while providing a consistent return on investment to our stockholders. MPS can be contacted through its website at www.monolithicpower.com or its support offices around the world.

Monolithic Power Systems, MPS, and the MPS logo are registered trademarks of Monolithic Power Systems, Inc. in the U.S. and trademarked in certain other countries.

Monolithic Power Systems, Inc.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands, except par value)
     June 30, December 31, 2026 2025ASSETS   Current assets:   Cash and cash equivalents$1,005,587 $1,099,302 Short-term investments 408,174  157,243 Accounts receivable, net 343,620  255,626 Inventories 675,849  564,649 Other current assets 44,156  106,982 Total current assets 2,477,386  2,183,802 Property and equipment, net 774,549  627,689 Acquisition-related intangible assets, net 8,216  8,790 Goodwill 25,944  25,944 Deferred tax assets, net 1,182,833  1,182,883 Other long-term assets 217,279  165,091 Total assets$4,686,207 $4,194,199     LIABILITIES AND STOCKHOLDERS’ EQUITY   Current liabilities:   Accounts payable$182,224 $138,272 Accrued compensation and related benefits 93,635  85,963 Other accrued liabilities 222,075  145,130 Total current liabilities 497,934  369,365 Income tax liabilities 75,022  75,022 Deferred tax liabilities 90,316  90,480 Other long-term liabilities 127,511  127,835 Total liabilities 790,783  662,702 Commitments and contingencies   Stockholders’ equity:   Common stock and additional paid-in capital: $0.001 par value; shares authorized: 150,000; shares issued and outstanding: 49,142 and 48,709, respectively 1,033,062  936,998 Retained earnings 2,861,853  2,609,651 Accumulated other comprehensive income (loss) 509  (15,152)Total stockholders’ equity 3,895,424  3,531,497 Total liabilities and stockholders’ equity$4,686,207 $4,194,199         Monolithic Power Systems, Inc.
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share amounts)
     Three Months Ended June 30, Six Months Ended June 30,  2026  2025  2026  2025Revenue$980,642 $664,574 $1,784,827 $1,302,128Cost of revenue 439,572  298,558  798,692  582,882Gross profit 541,070  366,016  986,135  719,246Operating expenses:       Research and development 118,618  96,266  219,184  188,493Selling, general and administrative 118,558  104,992  221,905  197,236Total operating expenses 237,176  201,258  441,089  385,729Operating income 303,894  164,758  545,046  333,517Other income, net 17,835  12,220  23,865  17,351Income before income taxes 321,729  176,978  568,911  350,868Income tax expense 64,431  41,969  118,387  80,807Net income$257,298 $135,009 $450,524 $270,061        Net income per share:       Basic$5.24 $2.82 $9.17 $5.64Diluted$5.22 $2.81 $9.15 $5.62Weighted-average shares outstanding:       Basic 49,138  47,887  49,118  47,869Diluted 49,260  48,019  49,251  48,012             RECONCILIATION OF NET INCOME TO NON-GAAP NET INCOME
(Unaudited, in thousands, except per share amounts)
     Three Months Ended
June 30, Six Months Ended
June 30,  2026  2025  2026  2025Net income$257,298 $135,009 $450,524 $270,061        Adjustments to reconcile net income to non-GAAP net income:       Stock-based compensation and related expenses 53,549  60,280  102,087  114,091Amortization of acquisition-related intangible assets 320  320  640  640Deferred compensation plan expense, net 963  281  585  275Tax effect 7,948  6,290  17,554  10,926Non-GAAP net income$320,078 $202,180 $571,390 $395,993        Non-GAAP net income per share:       Basic$6.51 $4.22 $11.63 $8.27Diluted$6.50 $4.21 $11.60 $8.25        Shares used in the calculation of non-GAAP net income per share:       Basic 49,138  47,887  49,118  47,869Diluted 49,260  48,019  49,251  48,012             RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN
(Unaudited, in thousands)
     Three Months Ended June 30, Six Months Ended June 30,  2026  2025  2026  2025Gross profit$541,070  $366,016  $986,135  $719,246 Gross margin 55.2%  55.1%  55.3%  55.2%        Adjustments to reconcile gross profit to non-GAAP gross profit:       Stock-based compensation and related expenses 1,767   1,915   3,449   3,621 Amortization of acquisition-related intangible assets 287   287   574   574 Deferred compensation plan expense 2,113   605   1,470   442 Non-GAAP gross profit$545,237  $368,823  $991,628  $723,883 Non-GAAP gross margin 55.6%  55.5%  55.6%  55.6%                 RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES
(Unaudited, in thousands)

 Three Months Ended June 30, Six Months Ended June 30,  2026  2025  2026  2025Total operating expenses$237,176  $201,258  $441,089  $385,729         Adjustments to reconcile total operating expenses to non-GAAP total operating expenses:       Stock-based compensation and related expenses (51,782)  (58,365)  (98,638)  (110,470)Amortization of acquisition-related intangible assets (33)  (33)  (66)  (66)Deferred compensation plan expense (7,781)  (5,256)  (6,458)  (4,063)Non-GAAP operating expenses$177,580  $137,604  $335,927  $271,130                  RECONCILIATION OF OPERATING INCOME TO NON-GAAP OPERATING INCOME
(Unaudited, in thousands)
     Three Months Ended June 30, Six Months Ended June 30,  2026  2025  2026  2025Total operating income$303,894 $164,758 $545,046 $333,517        Adjustments to reconcile total operating income to non-GAAP total operating income:       Stock-based compensation and related expenses 53,549  60,280  102,087  114,091Amortization of acquisition-related intangible assets 320  320  640  640Deferred compensation plan expense 9,894  5,861  7,928  4,505Non-GAAP operating income$367,657 $231,219 $655,701 $452,753             RECONCILIATION OF OTHER INCOME, NET, TO NON-GAAP OTHER INCOME, NET
(Unaudited, in thousands)
     Three Months Ended June 30, Six Months Ended June 30,  2026  2025  2026  2025Total other income, net$17,835  $12,220  $23,865  $17,351         Adjustments to reconcile other income, net to non-GAAP other income, net:       Deferred compensation plan income (8,931)  (5,580)  (7,343)  (4,230)Non-GAAP other income, net$8,904  $6,640  $16,522  $13,121                  RECONCILIATION OF INCOME BEFORE INCOME TAXES TO NON-GAAP INCOME BEFORE INCOME TAXES
(Unaudited, in thousands)
     Three Months Ended June 30, Six Months Ended June 30,  2026  2025  2026  2025Total income before income taxes$321,729 $176,978 $568,911 $350,868        Adjustments to reconcile income before income taxes to non-GAAP income before income taxes:       Stock-based compensation and related expenses 53,549  60,280  102,087  114,091Amortization of acquisition-related intangible assets 320  320  640  640Deferred compensation plan expense, net 963  281  585  275Non-GAAP income before income taxes$376,561 $237,859 $672,223 $465,874             2026 THIRD QUARTER OUTLOOK
RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN
(Unaudited)
   Three Months Ending  September 30, 2026 Low HighGross margin55.2% 55.8%Adjustment to reconcile gross margin to non-GAAP gross margin:   Stock-based compensation and other expenses0.2  0.2 Non-GAAP gross margin55.4% 56.0%       RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES
(Unaudited, in thousands)
   Three Months Ending  September 30, 2026 Low HighOperating expenses$252,700  $258,700 Adjustments to reconcile operating expenses to non-GAAP operating expenses:   Stock-based compensation and other expenses (51,500)  (53,500)Non-GAAP operating expenses$201,200  $205,200 

Analysts on Wall Street project that Monolithic Power (MPWR - Free Report) will announce quarterly earnings of $5.88 per share in its forthcoming report, representing an increase of 39.7% year over year. Revenues are projected to reach $903.97 million, increasing 36% from the same quarter last year.

The consensus EPS estimate for the quarter has been revised 0.2% lower over the last 30 days to the current level. This reflects how the analysts covering the stock have collectively reevaluated their initial estimates during this timeframe.

Prior to a company's earnings release, it is of utmost importance to factor in any revisions made to the earnings projections. These revisions serve as a critical gauge for predicting potential investor behaviors with respect to the stock. Empirical studies consistently reveal a strong link between trends in earnings estimate revisions and the short-term price performance of a stock.

While investors typically use consensus earnings and revenue estimates as indicators of quarterly business performance, exploring analysts' projections for specific key metrics can offer valuable insights.

With that in mind, let's delve into the average projections of some Monolithic metrics that are commonly tracked and projected by analysts on Wall Street.

It is projected by analysts that the 'Revenue by End Market- Storage and Computing' will reach $186.31 million. The estimate suggests a change of -4.6% year over year.

The average prediction of analysts places 'Revenue by End Market- Communications' at $127.14 million. The estimate indicates a change of +72.3% from the prior-year quarter.

Analysts forecast 'Revenue by End Market- Automotive' to reach $155.46 million. The estimate indicates a change of +7.1% from the prior-year quarter.

According to the collective judgment of analysts, 'Revenue by End Market- Enterprise Data' should come in at $323.04 million. The estimate suggests a change of +124.3% year over year.

Analysts' assessment points toward 'Revenue by End Market- Industrial' reaching $51.15 million. The estimate indicates a change of +9.5% from the prior-year quarter.

The collective assessment of analysts points to an estimated 'Revenue by End Market- Consumer' of $58.00 million. The estimate indicates a year-over-year change of -2.9%.

View all Key Company Metrics for Monolithic here>>>

Monolithic shares have witnessed a change of +2% in the past month, in contrast to the Zacks S&P 500 composite's +1.7% move. With a Zacks Rank #2 (Buy), MPWR is expected outperform the overall market performance in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .

Investors in Monolithic Power Systems, Inc. (MPWR - Free Report) need to pay close attention to the stock based on moves in the options market lately. That is because the Sept. 18, 2026 $560.00 Call had some of the highest implied volatility of all equity options today.

What is Implied Volatility?Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mean there is an event coming up soon that may cause a big rally or a huge sell-off. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy.

What do the Analysts Think?Clearly, options traders are pricing in a big move for Monolithic Power shares, but what is the fundamental picture for the company? Currently, Monolithic Power is a Zacks Rank #2 (Buy) in the Semiconductor - Analog and Mixed industry that ranks in the Top 11% of our Zacks Industry Rank. Over the last 60 days, one analyst has increased the earnings estimate for the current quarter, while none have dropped their estimates. The net effect has taken our Zacks Consensus Estimate for the current quarter from $6.43 per share to $6.45 in that period.

Given the way analysts feel about Monolithic Power right now, this huge implied volatility could mean there’s a trade developing. Oftentimes, options traders look for options with high levels of implied volatility to sell premium. This is a strategy many seasoned traders use because it captures decay. At expiration, the hope for these traders is that the underlying stock does not move as much as originally expected.

NEW YORK & NEW ORLEANS--(BUSINESS WIRE)--Former Attorney General of Louisiana, Charles C. Foti, Jr., Esq., a partner at the law firm of Kahn Swick & Foti, LLC (“KSF”), announces that KSF has commenced an investigation into Monolithic Power Systems, Inc. (NasdaqGS: MPWR) (“Monolithic” or the “Company”).On November 11, 2024, Edgewater Research analysts published a report revealing that Nvidia, the Company's largest customer, had cancelled half of its outstanding Monolithic Power orders and int.

Nvidia went on an incredible run to become the world's most valuable publicly traded company, but its 11% year-to-date return looks pedestrian compared to some of the other AI stocks that have been capturing headlines in recent months.

The three growth stocks on this list all have exposure to the AI infrastructure build-out, and they've all outgained Nvidia so far this year. They also look well positioned to extend their rallies and outperform it in 2027.

Image source: Getty Images.

1. Monolithic Power Systems Monolithic Power Systems (MPWR +0.49%) produces power management systems that enable data centers to maintain continuous uptime without overloading AI chips. Power management systems work hand in hand with liquid-cooling solutions to keep chips and servers cool.

Today's Change

(

0.49

%) $

6.35

Current Price

$

1,312.00

The stock has rallied by more than 40% year to date as AI data centers' demand for the company's products has grown. Monolithic Power Systems' revenue increased by 26.1% year over year in the first quarter, and net income grew at a slightly faster rate.

While the company lists six business segments in its earnings results, two of them are doing most of the heavy lifting. Enterprise data is the main one. It accounted for about one-third of total sales, and it nearly doubled year over year. This part of the business addresses power management and integrated solutions for AI chips and servers.

The communications segment is the other big one. This part of the business focuses on telecom infrastructure, satellite systems, and networking equipment. Its top line was up by 55.5% year over year, and up 33.1% sequentially, thanks to AI tailwinds. It makes up 14% of total sales.

As these two hypergrowth parts of the business gain market share, Monolithic Power Systems should experience accelerating revenue growth. That should position the stock to outperform Nvidia again in 2027.

2. Astera Labs Astera Labs (ALAB 5.04%) creates rack-scale connectivity hardware and software for AI servers. Many hyperscalers are turning to the company for connectivity solutions that enable faster data transmission between AI chips and server clusters.

Today's Change

(

-5.04

%) $

-16.12

Current Price

$

303.62

Its revenue growth rates should prompt investors to give it a closer look. Sales almost doubled year over year in its first quarter, and its 14% sequential growth rate shows solid momentum. Double-digit percentage sequential revenue growth rates have become more common in the AI hardware space; for example, such a trend preceded Micron's incredible share price run.

Management's guidance is already pointing to meaningful growth from here. The $360 million midpoint of the guidance range for Q2 revenue implies 16.7% sequential growth. However, if recent history is any indicator, the actual growth rate may be closer to 20%. Astera Labs told investors to only expect up to $297 million in Q1 revenue, and yet it delivered $308.4 million.

Although the stock has almost doubled this year, it's also down by roughly 33% from its peak over the past few weeks, which presents a good buy-the-dip opportunity.

3. Cadence Design Systems Cadence Design Systems (CDNS 9.15%) is off to a slower start than the other AI stocks on this list. It's up by almost 20% this year, driven by wins in electronic design automation software and hardware among chipmakers. These solutions enable companies like Nvidia and Advanced Micro Devices to test and build semiconductors before sending their designs to the third-party foundries that manufacture them.

Its growth rates are more moderate than the other two picks, but it sports a record $8 billion backlog. Cadence Design Systems also told investors to expect 17% revenue growth for 2026.

Agentic AI is set to be a major tailwind for the company. Its technology makes it easier to design advanced AI chips that can handle more rigorous workloads than those currently in data centers. That makes it a key checkpoint for AI chips, and that market can support revenue growth and profit margin expansion, which in turn would make the stock more attractive.

July 14, 2026 16:01 ET  | Source: Monolithic Power Systems, Inc.

SCHAFFHAUSEN, Switzerland, July 14, 2026 (GLOBE NEWSWIRE) -- Monolithic Power Systems, Inc. (MPS) (Nasdaq: MPWR), a fabless global company that provides high-performance, semiconductor-based power electronics solutions, today announced it will report its second quarter 2026 financial results on Thursday, July 30, 2026 after the market closes. MPS will host a question-and-answer webinar at 2:00 p.m. PT / 5:00 p.m. ET on the same day to discuss the results and business outlook.

The webinar can be accessed from the Investor Relations section of the MPS website at www.monolithicpower.com. A replay of the event will be available on the website for one year.

About Monolithic Power Systems, Inc.

Monolithic Power Systems, Inc. (“MPS”) is a fabless global company that provides high-performance, semiconductor-based power electronics solutions. MPS’s mission is to reduce energy and material consumption to improve all aspects of quality of life and create a sustainable future. Founded in 1997 by our CEO Michael Hsing, MPS has three core strengths: deep system-level knowledge, strong semiconductor design expertise, and innovative proprietary technologies in the areas of semiconductor processes, system integration, and packaging. These combined advantages enable MPS to deliver reliable, compact, and monolithic solutions that are highly energy-efficient, cost-effective, and environmentally responsible while providing a consistent return on investment to our stockholders. MPS can be contacted through its website at www.monolithicpower.com or its support offices around the world.

###

Monolithic Power Systems, MPS, and the MPS logo are registered trademarks of Monolithic Power Systems, Inc. in the U.S. and trademarked in certain other countries.

Contact:
Tony Balow
Vice President, Finance
Monolithic Power Systems, Inc.
[email protected]

14.7.2026 19:54, DJI, SPX, QQQ

Americké akciové trhy během probíhajícího obchodování převážně rostou, k čemuž přispívají mírnější data o americké inflaci, která oslabují obavy z brzkého zvyšování úrokových sazeb.

Zatímco technologický Nasdaq Composite posiluje o 1,01 % na 26134,09 bodu a širší S&P 500 si připisuje 0,4 % na úroveň 7545,34 bodu, index Dow Jones mírně ztrácí 0,14 % na 52422,92 bodu. Dobrou náladu na trhu podporují solidní výsledky velkých bank na začátku výsledkové sezóny a oživení u výrobců čipů, a to i přes prudký pád akcií International Business Machines Corp (IBM).

Mezi jednotlivými odvětvími indexu S&P 500 vykazují nejsilnější výkon informační technologie s růstem o 1,4 %, následované komunikačními službami, které si připisují 1 % a základními materiály s drobným ziskem 0,2 %. Naopak největší ztráty utrpěla zdravotní péče, která odepisuje 1,7 %. Oslabuje také nezbytná spotřeba o 1,1 % a reality, které klesají o 0,5 %.

V čele růstu stojí společnost Crowdstrike Holdings (CRWD), jejíž akcie posilují o 11 %. Výrazně se daří také Monolithic Power Systems (MPWR) a Goldman Sachs Group (GS), které shodně připisují 7,7 %. Dobře si vede také Dell Technologies (DELL) o 7,2 % a Palo Alto Networks (PANW) s růstem o 6,8 %. Na druhé straně zažívá propad o 25 % společnost IBM (IBM) kvůli slabším tržbám. Výrazně oslabují také HCA Healthcare (HCA) o 7,0 %, GE HealthCare Technologies (GEHC) o 6,7 %, Biogen (BIIB) o 6,6 % a Intuitive Surgical (ISRG) se ztrátou 5,8 %.

Nižší inflační tlaky tlačí dolů výnosy desetiletých amerických vládních dluhopisů, které klesají o čtyři bazické body na 4,58 %. Americký dolar v reakci na data oslabuje, takže euro vůči němu zpevňuje o 0,4 % na 1,1427 dolaru a britská libra posiluje o 0,2 % na 1,3381 dolaru, přičemž japonský jen roste rovněž o 0,2 % na 162,18 jenu za dolar. Na komoditním trhu se daří ropě i drahým kovům. Severoamerická lehká ropa WTI přidává 1,3 % na 79,12 dolaru za barel a spotové zlato roste o 1,4 % na 4058,60 dolaru za unci. V zelených číslech se pohybuje také Bitcoin, který posiluje o 3,9 % na 64556,63 dolaru.

Index Dow Jones -0,14 % na 52422,92 b.
S&P 500 +0,4 % na 7545,34 b.
Nasdaq Composite +1,01 % na 26134,09 b.

Index S&P 500 +0,4 % na 7545,34 b. Nejsilnější sektory S&P Změna Nejslabší sektory S&P Změna Informační technologie +1,4 % Zdravotní péče -1,7 % Komunikační služby +1 % Nezbytná spotřeba -1,1 % Základní materiály +0,2 % Reality -0,5 % Nejsilnější akcie S&P Změna Nejslabší akcie S&P Změna Crowdstrike Holdings (CRWD) +11 % IBM (IBM) -25 % Monolithic Power Systems (MPWR) +7,7 % HCA Healthcare (HCA) -7,0 % Goldman Sachs Group (GS) +7,7 % GE HealthCare Technologies (GEHC) -6,7 % Dell Technologies (DELL) +7,2 % Biogen (BIIB) -6,6 % Palo Alto Networks (PANW) +6,8 % Intuitive Surgical (ISRG) -5,8 %
Daniel Marván, Fio banka, a.s.

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Data centers will consume up to 12% of U.S. electrical demand by 2028, and every EV on the road, every AI training rack and every solar inverter feeding the grid pushes current through a power semiconductor. Silicon carbide (SiC) and gallium nitride (GaN) are the choke points on that demand curve. Five U.S.-listed names control the flow, and the money is already moving.

1. Wolfspeed (WOLF): The Turnaround Nobody Wanted Wolfspeed (NYSE:WOLF | WOLF Price Prediction) is the least obvious name on this list because six months ago it was in bankruptcy court. Today it is a leaner SiC pure-play with the first commercially available 10 kV SiC power MOSFET aimed at grid modernization, industrial electrification, and AI data center infrastructure. Its AI data center segment grew roughly 30% sequentially in Q3, on top of about 50% sequential growth the prior quarter. That signals a structural pivot away from a stalling EV cycle into the highest-value verticals in power.

Shares are up 86.42% year to date, though the last month punched the stock down 18.72% as the turnaround gets digested. Fiscal Q3 revenue came in at $150.2 million, edging consensus, while the company refinanced approximately $476 million of first-lien debt, cut total debt by $97 million, and stripped $62 million of annual interest expense. Shareholders’ equity swung to $1.02 billion from deeply negative in a single quarter and cash sits at $1.16 billion.

This is the highest-beta name in the electrification stack: It either compounds through 2027 or it breaks. The next stock runs the same SiC playbook, but at roughly 20x the scale and a fraction of the volatility.

2. ON Semiconductor (ON): The Scaled SiC Heavyweight ON Semiconductor (NASDAQ:ON) is the operator that already dominates the SiC supply chain that WOLF is fighting to defend. EliteSiC sits inside 900V EV architectures with Geely and NIO, and the company just landed a design win with Sineng Electric for a 430 kW liquid-cooled energy storage system plus a 320 kW solar inverter. Autos, AI, and grid, all built on one wafer platform. AI data center revenue more than doubled year over year in Q1 FY26 and grew 30% sequentially.

Q1 FY26 revenue landed at $1.513 billion, beating consensus, with the Power Solutions Group up 14% YoY to $736.6 million and non-GAAP gross margin snapping back to 38.5%, up from 20.3% a year earlier. Management guided Q2 revenue to $1.535 billion to $1.635 billion and has a $6 billion share repurchase authorization in place. Shares are up 69.24% year to date, trading at 31x forward earnings against an average analyst target of $113.72.

ON is the risk-managed way to own SiC. The next name plays the same thesis in GaN and has quietly doubled this year as industrial power conversion took over its revenue mix.

3. Power Integrations (POWI): The Industrial GaN Pivot Power Integrations (NASDAQ:POWI) has spent two years quietly redirecting its PowiGaN franchise into renewables, battery storage, home automation, and automotive. The result: industrial revenue grew 23% year over year and now sits at 41% of the revenue mix, up from 34%. That is a mix shift you cannot fake, and it puts POWI directly in the path of every grid-scale battery and rooftop inverter buildout.

Q1 FY26 EPS came in at $0.25 versus $0.23 expected, revenue at $108.3 million (+2.6% YoY), and PowiGaN products grew more than 40% across full-year FY25. Non-GAAP gross margin held at 53.5%, and Q2 revenue guidance is $115 million to $120 million. Shares are up 93.22% year to date, with the average analyst target at $76.20 and forward P/E at 48.

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POWI is the industrial GaN pure-play. But the biggest AI-server design wins in this stack belong to the next name, and it is trading like a growth stock for a reason.

4. Monolithic Power Systems (MPWR): The AI Server Arms Dealer Monolithic Power Systems (NASDAQ:MPWR) is the power-management chip designer inside the AI server rack. Enterprise Data revenue nearly doubled year over year, up 97.7% to $262.8 million, and now represents 32.7% of total revenue. Management is guiding Enterprise Data growth of more than 50% for 2026, and the company just sampled its first high-speed DDR5 interface products alongside an 800V data center power solution.

Q1 FY26 revenue was $804.2 million, up 26.1% YoY, EPS of $5.10 beat the $4.90 consensus, GAAP operating margin expanded to 30.0%, up 3.5 percentage points YoY, and the board raised the quarterly dividend 28% to $2.00. Q2 revenue guidance is $890 million to $910 million, and Communications revenue grew 55.5% YoY to $111.5 million. Shares are up 44.48% year to date, trading at 55x forward earnings with an average analyst target of $1,789.23.

MPWR is the highest-quality name in this stack. If you want maximum torque on the same secular curve at a fraction of the market cap, the last slot is where the payoff lands.

5. Navitas Semiconductor (NVTS): The Payoff Trade Navitas Semiconductor (NASDAQ:NVTS) is the small-cap payoff: a pure-play GaN and high-voltage SiC operator that just staked its entire future on AI data centers, grid, and industrial electrification under a strategy management calls Navitas 2.0. At NVIDIA GTC it debuted 800V-to-6V and 800V-to-50V power delivery boards and demonstrated a 250 kW solid-state transformer with EPFL. NVTS is a formal NVIDIA power partner for the 800V DC architecture rolling out across next-gen AI factories.

Q1 FY26 revenue was $8.60 million, up 18% sequentially, with a fourth straight EPS beat at -4 cents versus the -5 cents expected. High-power markets grew roughly 35% year over year, non-GAAP gross margin held at 39.0%, and management is targeting a $3.5 billion serviceable market by 2030 growing at a 60%-plus CAGR. Cash sits at $221 million, and a long-term GlobalFoundries U.S. GaN foundry partnership comes online in late 2026.

Shares are up 60.74% year to date, with a beta of 3.815 and a 52-week range of $5.44 to $34.17. Smallest float, highest torque, most direct pure-play on the NVIDIA 800V build-out. It trades like a call option on the entire electrification thesis.

The Setup Electrification is a compounding demand pull across EVs, AI factories, and grid modernization, all funneling into SiC and GaN power silicon. WOLF is the boom-or-bust turnaround, ON and MPWR are the scaled compounders, POWI is the industrial pivot, and NVTS is the leveraged bet on the 800V data center architecture. These five span the full risk spectrum on the same secular curve. The demand curve does not wait, and the money is already rotating in.

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, /PRNewswire/ -- Former Attorney General of Louisiana, Charles C. Foti, Jr., Esq., a partner at the law firm of Kahn Swick & Foti, LLC ("KSF"), announces that KSF has commenced an investigation into Monolithic Power Systems, Inc. (NasdaqGS: MPWR) ("Monolithic" or the "Company").

On November 11, 2024, Edgewater Research analysts published a report revealing that Nvidia, the Company's largest customer, had cancelled half of its outstanding Monolithic Power orders and intended to eliminate Monolithic Power Systems' allocation to most variants of its next-generation Blackwell chips due to "[p]erformance issues" with the Company's products, and that Nvidia engineers had "lost confidence" in the Company's products and decided to turn to its competitors as "primary suppliers."

Thereafter, the Company and certain of its executives were sued in a securities class action lawsuit, charging them with failing to disclose material information during the Class Period in violation of federal securities laws, which remains ongoing.

KSF's investigation is focusing on whether Monolithic's officers and/or directors breached their fiduciary duties to its shareholders or otherwise violated state or federal laws. 

If you have information that would assist KSF in its investigation, or have been a long-term holder of Monolithic shares and would like to discuss your legal rights, you may, without obligation or cost to you, call toll-free at 1-833-938-0905 or email KSF Managing Partner Lewis Kahn ([email protected]), or visit https://www.ksfcounsel.com/cases/nasdaqgs-mpwr/ to learn more.

About Kahn Swick & Foti, LLC

KSF, whose partners include former Louisiana Attorney General Charles C. Foti, Jr., is one of the nation's premier boutique securities litigation law firms. This past year, KSF was ranked by SCAS among the top 10 firms nationally based upon total settlement value. KSF serves a variety of clients, including public and private institutional investors, and retail investors - in seeking recoveries for investment losses emanating from corporate fraud or malfeasance by publicly traded companies. KSF has offices in New York, Delaware, California, Louisiana, Chicago, and a representative office in Luxembourg.

TOP 10 Plaintiff Law Firms - According to ISS Securities Class Action Services

To learn more about KSF, you may visit www.ksfcounsel.com.

Contact:
Kahn Swick & Foti, LLC
Lewis Kahn, Managing Partner
[email protected]
1-877-515-1850
1100 Poydras St., Suite 960
New Orleans, LA 70163

CONNECT WITH US: Facebook || Instagram || YouTube || TikTok || LinkedIn

SOURCE Kahn Swick & Foti, LLC

Key Takeaways MPWR gained 40.4% in six months, outperforming its industry, sector and the S&P 500.Monolithic Power Systems is benefiting from AI, automotive and communications demand and expanding capacity.MPWR faces weak demand in notebook business, premium valuation and stiff competition. Monolithic Power Systems Inc. (MPWR - Free Report) shares have risen 40.4% in the past six months compared with the industry’s growth of 31.9%. The stock has outperformed the Zacks Computer & Technology sector and the S&P 500 during the same time frame.

Image Source: Zacks Investment Research

The company has outperformed its peers like Analog Devices, Inc. (ADI - Free Report) and Microchip Technology (MCHP - Free Report) . Shares of Analog Devices have jumped 30%, and shares of Microchip have risen 19.1%.

MPWR Benefits From Strong Demand Across Multiple VerticalsMonolithic is witnessing solid traction across multiple end markets. Strong demand for AI accelerators, CPUs and server power management solutions is driving demand in the Enterprise Data segment. The company’s robust capability in high-power-density solutions, monolithic integration and advanced module designs is boosting its competitive edge in the AI infrastructure vertical. MPS differentiates itself by offering single-piece silicon-based power solutions, unlike competitors that rely on multiple silicon components. This facilitates greater efficiency, compact designs and better thermal performance. These factors are becoming critical in next-generation AI servers and GPUs that are moving toward higher power requirements.

Strong demand for optical modules and Ethernet switches used in AI data centers is propelling growth in the Communications segment. Automotive remains a long-term growth driver as semiconductor content rises across ADAS, infotainment and connectivity applications. Management indicated that the pipeline across Automotive and Enterprise Data continues to expand through new project wins across regions and customers.

Robotics and physical AI are an emerging long-term growth driver. AI adoption in robotics has already started to create commercial opportunities. Recognizing this trend, Monolithic is broadening its exposure to robotics, building automation and portable AI devices. sampled its first DDR5 high-speed interface products, expanding beyond power management into higher-value semiconductor content. The company’s growing emphasis on innovation, diversifying its portfolio offering to different emerging opportunities, bodes well for sustainable growth.

It is to be noted that MPWR is steadily increasing its manufacturing capacity. It has raised its manufacturing capacity target from $4 billion to $6 billion to support the growing demand. It is also actively diversifying its production geographically. This will boost supply chain resilience and allow the company to capture opportunities in unexplored markets.

Major ChallengesMPWR continues to face weakness in the consumer notebook market. Memory shortages, higher memory prices and weaker consumer demand will likely continue to impact demand in the near term.

The company is venturing into several new growth areas to diversify its revenue stream. It is investing in DDR5 interfaces, robotics, 800V power architectures and silicon carbide technologies. Despite the significant upside in these markets in the long term, commercial deployments are still in early stages. The timing of revenue generation from these verticals remains uncertain.

Monolithic operates in a highly competitive analog semiconductor market populated by larger companies with broader product portfolios and deeper financial resources. It faces intense competition across analog and power management semiconductors from larger peers, such as Analog Devices, Microchip, Texas Instruments and others. The company must continue investing heavily in research and development, manufacturing capacity and new technologies to maintain its competitive position. Any slowdown in product innovation or execution could affect future socket wins and profitability.

Estimate Revision TrendEarnings estimates for MPWR for 2026 and 2027 have remained unchanged over the past 60 days.

Image Source: Zacks Investment Research

Key Valuation Metric of MPWRFrom a valuation standpoint, MPWR is currently trading at a premium compared to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 50.31 forward 12-month earnings, higher than 29.11 for the industry.

Image Source: Zacks Investment Research

End NoteSolid momentum across multiple verticals, such as AI servers and optical networking, is a major growth catalyst. Design wins across the automotive and enterprise markets are a positive. Focus on manufacturing capacity expansion and supply chain diversification will likely bring long-term benefits. Portfolio expansion beyond core power management markets is a tailwind. However, demand softness in the consumer notebook market due to memory shortages and rising prices remains a concern. Geopolitical volatility and macro headwinds can impact its supply chain operations and hinder customer spending. Competition from other major players in the industry is weighing on margins. With a Zacks Rank #3 (Hold), MPWR appears to be treading in the middle of the road, and new investors could be better off if they trade with caution. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Did Monolithic Power Systems, Inc. Insiders Breach their Fiduciary Duties to Shareholders? PR Newswire NEW YORK,

The July 2026 Top 25 High-Growth Dividend Stocks list targets high-quality companies with strong dividend growth and attractive valuations. The list's average starting yield is 1.13%, with a collective 5-year dividend growth rate of 16.24% and an estimated +23% annual long-term return. Key standouts include Nvidia (NVDA) for growth and undervaluation, Accenture (ACN) and Intuit (INTU) for high yields, and Monolithic Power (MPWR) for dividend growth.

Listen to the audio version of this article (generated by AI).

Tom Yeung here with your Sunday Digest.

In 2025, two professors wanted to see whether ChatGPT made people less creative. And so, they recruited 356 participants and asked them to perform a series of tasks, including one in which they were to make a toy from a paper bag, a brick, and a fan.

The researchers forced some test subjects to use their own creativity. Others were given access to ChatGPT for help.

To no one’s surprise, the cohorts without AI came up with entirely unique ideas. (One suggested adopting the brick as a pet, while another proposed disassembling the fan and turning the parts into nunchucks.)

But those using ChatGPT came up with almost the same toys. Ninety-four percent of their ideas “shared overlapping concepts,” and nine participants independently named their toy the same thing: the “Build-a-Breeze Castle.”

It’s as if AI is turning the entire world into the blandness of 2000s beige home interiors.

Emails start sounding the same…

Movie recommendations are duller…

And everything has that “competent but forgettable” AI sheen.

In a new presentation, legendary quant specialist Louis Navellier says this convergence is also happening on Wall Street. Millions of trading algorithms, advisors, and investors are increasingly relying on the same AI-powered tools.

The danger isn’t that AI is wrong…

It’s that AI causes everyone to do the same thing.

As Louis puts it, this creates crowded trades, concentrated ownership, and the potential for violent reversals when sentiment changes. It helps explain the strange movements in SpaceX (SPCX) over the past several days, and why “groupthink” seems to be taking over markets.

In that new free broadcast, Louis calls this the 50-Million AI Coordination Trap, a phenomenon where investors are all doing identical things without realizing it. Stocks that are popular among AI algorithms keep going up, while everything else seems to go nowhere. It’s becoming increasingly important to know what AI algorithms are recommending.

Now, many investors will dislike the idea of basing their decisions on AI-powered algorithms. I’m certainly uncomfortable with it.

Nevertheless, Louis has created a stock grading system that has long dealt with this issue by balancing “follow-the-money” scores against a company’s real fundamentals. Only companies that pass both earn his top “Buy” ratings.

And so, to illustrate, I’d like to showcase three of his system’s top-rated companies in this update. And if you’d like to learn more (and get access to that system), then click here.

Stock to Buy No. 1: Quality in a Risk-On Market Swarm trading (whether driven by AI or humans) can mask a lot of bad behavior.

The venture capital boom of the mid-2010s allowed Theranos to raise almost a billion dollars, and so did truck maker Nikola during the electric vehicle craze of 2021. FTX rode a wave of crypto enthusiasm that same year. The founders of all three companies ended up getting convicted of fraud.

Now, most AI semiconductor companies are not criminal enterprises. They’re making legitimate bets on which technologies will come out ahead. But I guarantee we’ll see some spectacular blowups once AI trading tools decide to start selling the hottest chip companies.

To avoid the risk of accidentally buying frauds or mediocre firms, I’ve purposely favored blue-chip semiconductor companies in this newsletter. And it turns out it’s very possible to buy well-established chipmakers for triple-digit gains. Arm Holdings plc (ARM) (+110%) and Cohu Inc. (COHU) (+120%) are some recent examples.

This week, I’d like to bring you one more company that Louis’ system favors. It’s the bluest of blue-chip semiconductor stocks that should do well long after the current AI rally fades:

Texas Instruments Inc. (TXN).

Texas Instruments is the world’s largest analog chipmaker, specializing in the type of semiconductors that handle messy, real-world signals. These are things like pressure… temperature… cell phone signals… human heart rates… and more. Its chips convert this real-world information into the clean “0’s” and “1’s” that digital chips can then process.

Growth has been solid. In the most recent quarter, the company reported a 19% increase in revenues, driven by a 30% rise from industrial customers and a 90% jump in data center demand. AI servers use huge amounts of electricity, and hundreds of analog sensors per rack are needed to track power usage, heat, and voltages.

Texas Instruments should also benefit long after the AI data center boom ends, thanks to its large exposure to self-driving vehicles, humanoid robots, and other AI-powered robotics.

Louis’ system seems to agree. It recently upgraded TXN to a “B,” and highlights the firm’s strong earnings power and upward analyst revisions to stay invested for the long haul, even as “smart money” jumps in for the short-term AI boost.

Stock to Buy No. 2: A Second Power Play In March 2025, I highlighted three stocks to buy for the AI Revolution.

“These are firms that learned to harness the often uncontrollable power of AI,” I wrote. “And as the tech world puts their collective foot on the R&D gas, we’re going to see these firms surge ahead.”

The trio have since returned 117% on average. And the best part is that one of these companies is still a “Buy”:

Monolithic Power Systems Inc. (MPWR).

Monolithic is a leader in power management chips for AI devices. These are the tiny semiconductors that use data (often from Texas Instruments) to convert messy electricity flows into the precise voltages that semiconductors need to function.

This is an incredibly important job. In AI data centers, servers often start up all at once, creating voltage dips and spikes. (It’s why turning on a microwave can briefly dim a home’s lights.) And without proper regulation, these power surges can fry any electronic chip connected to the system.

Monolithic’s products help data centers manage this challenge. The Seattle area-based firm pioneered putting multiple power management components onto a single integrated chip (that’s the “monolithic” in the name), and its advanced devices have become the gold standard for high-end AI chips. Monolithic chips are smaller, run cooler, waste less energy, and are more reliable than the patchwork approach that rivals use.

The result is that Monolithic has been growing fast. Revenues increased 26% last year and are on track to notch a 32% gain this year. The company also has been able to take market share of the voltage regulator chip market, thanks to its higher-end designs.

Louis’ system agrees. The company scores a top “A” grade in its quantitative “follow-the-money” score, and valuations remain reasonable, thanks to its rapid earnings growth.

Stock to Buy No. 3: America’s Healthcare Pivot Finally, I’d like to highlight one decidedly non-AI stock with a lot of “smart money” buyers:

Oncology Institute Inc. (TOI).

This cancer care company has become a potential breakout firm, with strong institutional buying (read: AI-powered investors) and the fundamentals to match.

In short, Oncology Institute runs a network of 146 clinics across five states. Health plans pay TOI a fixed per-member-per-month fee to take on cancer patients, and TOI profits if it provides care below that fee. It was a historically unexciting business that relied on acquisitions and partnerships for growth.

However, TOI now has three potential catalysts.

The first is political.

In late April, Health and Human Services Secretary Robert F. Kennedy Jr. gave testimony to Congress that would have seemed totally out of character a year ago.

“China is now eating our lunch,” a visibly shaken Kennedy said in front of a congressional committee. “They went from running 3% of clinical trials to running 30%… We are losing scientists, we’re losing our IPs… and we’re going to lose our biosecurity.”

The federal government has since pivoted toward a far more accommodating stance to the U.S. healthcare system. Following Kennedy’s testimony, a key Food and Drug Administration committee unanimously recommended its first vaccine since the start of the current Trump administration. (An mRNA vaccine, no less!) Several days later, the Department of Health and Human Services announced Operation TrialBlazer, an ambitious project designed to fast-track clinical research.

This is important because TOI generates most of its profits not from direct cancer care, but rather from the expensive oncology drugs that its patients use. And because reimbursement rates are largely set by the Centers for Medicare & Medicaid Services (CMS), favorable posturing from the federal government is a clearly positive sign for TOI. As awful as it sounds, one of the easiest ways for regulators to spur cancer drug development is to raise what the government is willing to pay for them.

The second is TOI’s shift from negative profits to positive. In May, the company reiterated it expects to flip to positive adjusted EBITDA this year, and upgraded its free cash flow to positive $10 million at its midpoint, up from a previous prediction of a $5 million outflow. That matters because conservative investors often wait for companies to become profitable before buying.

The third is TOI’s high popularity among institutional and “smart money” investors. As mentioned earlier, these traders are beginning to show convergence in their actions. And as shares continue gaining momentum, these AI algorithms usually become more willing to buy a stock, not less. Louis’ system awards TOI a solid “B” for strong institutional buying, rising earnings momentum, and very strong sales growth.

The Human Nature of Artificial Intelligence It turns out that AI investing carries many of the same investing biases that we humans do. In one 2025 meta-study, a team of European researchers found that large language models:

Favor U.S. stocks. 93% of portfolios were invested in American stocks. Pursue risky allocations. 51% of investments were beyond normal allocations. Chase hot stocks. 28% of portfolios were invested in the top three equities that were traded most frequently in the past three months Ask an AI where to invest today, and it might give some combination of SpaceX, Nvidia Corp. (NVDA), and the latest meme stock.

Professionally designed AI algorithms are often not much better. They’re trained on the same data… use the same machine-learning techniques… and are even created by the same people.

It’s no surprise that momentum has emerged as the single most important factor for predicting stock market returns.

That’s why I think it’s essential for you to watch Louis Navellier’s latest presentation, where he outlines the opportunities and risks of this new convergent market.

The highs are going to be far higher than in the past. Momentum-seeking algorithms will see to that. And that means the lows will also be far more devastating.

If you invest with the crowd, be sure to do so safely.

Click here to learn how.

Until next week,

Thomas Yeung, CFA

Market Analyst, InvestorPlace

Thomas Yeung is a market analyst and portfolio manager of the Omnia Portfolio, the highest-tier subscription at InvestorPlace. He is the former editor of Tom Yeung’s Profit & Protection, a free e-letter about investing to profit in good times and protecting gains during the bad.

The Computer and Technology group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Has Monolithic Power (MPWR - Free Report) been one of those stocks this year? A quick glance at the company's year-to-date performance in comparison to the rest of the Computer and Technology sector should help us answer this question.

Monolithic Power is one of 592 individual stocks in the Computer and Technology sector. Collectively, these companies sit at #1 in the Zacks Sector Rank. The Zacks Sector Rank considers 16 different groups, measuring the average Zacks Rank of the individual stocks within the sector to gauge the strength of each group.

The Zacks Rank is a proven model that highlights a variety of stocks with the right characteristics to outperform the market over the next one to three months. The system emphasizes earnings estimate revisions and favors companies with improving earnings outlooks. Monolithic Power is currently sporting a Zacks Rank of #1 (Strong Buy).

Over the past three months, the Zacks Consensus Estimate for MPWR's full-year earnings has moved 18.4% higher. This signals that analyst sentiment is improving and the stock's earnings outlook is more positive.

Our latest available data shows that MPWR has returned about 72.5% since the start of the calendar year. Meanwhile, stocks in the Computer and Technology group have gained about 20% on average. This shows that Monolithic Power is outperforming its peers so far this year.

Arrow Electronics (ARW - Free Report) is another Computer and Technology stock that has outperformed the sector so far this year. Since the beginning of the year, the stock has returned 111.2%.

In Arrow Electronics' case, the consensus EPS estimate for the current year increased 44.6% over the past three months. The stock currently has a Zacks Rank #1 (Strong Buy).

To break things down more, Monolithic Power belongs to the Semiconductor - Analog and Mixed industry, a group that includes 10 individual companies and currently sits at #4 in the Zacks Industry Rank. Stocks in this group have gained about 69.7% so far this year, so MPWR is performing better this group in terms of year-to-date returns.

On the other hand, Arrow Electronics belongs to the Electronics - Parts Distribution industry. This 4-stock industry is currently ranked #19. The industry has moved +73% year to date.

Monolithic Power and Arrow Electronics could continue their solid performance, so investors interested in Computer and Technology stocks should continue to pay close attention to these stocks.