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Additional Reading from MarketBeat Media
Monolithic Power Systems: AI Stock Beat, Raised and Upgraded Post-EarningsSubmitted by Leo Miller. Originally Published: 5/5/2026. 
Key Points
- Monolithic Power Systems has been a top-performing chip stock in 2026, and its latest financials show why.
- The company exceeded estimates across the board and greatly increased its AI growth expectations.
- Wall Street analysts issued large price target increases despite shares falling slightly.
- Special Report: Elon Musk already made me a “wealthy man”
Stocks like NVIDIA (NASDAQ: NVDA) and Broadcom (NASDAQ: AVGO) often dominate semiconductor headlines. However, one lesser-known chip stock has been outpacing both in recent returns. That stock is Monolithic Power Systems (NASDAQ: MPWR), which has surged more than 70% in 2026 so far. By comparison, NVIDIA is up less than 10% this year, while Broadcom’s return sits near 20%.
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One driver of Monolithic’s performance is that energy efficiency is becoming increasingly important in data centers. GE Vernova (NYSE: GEV) is another company benefiting from this trend, with shares up more than 60% in 2026. Monolithic makes power chips and modules that regulate energy use across a range of systems, including AI equipment. Monolithic reported its latest results on April 30, and shares fell about 2% the following day. Still, Wall Street analysts responded by significantly raising price targets after the release, suggesting further opportunity may lie ahead. Monolithic’s Q1: 2 Beats and Strong GuidanceIn Q1 2026, Monolithic posted revenue of $804 million, an increase of 26% year over year (YOY). That comfortably beat expectations near $782 million, which implied roughly 23% growth. Adjusted earnings per share (EPS) came in at $5.10, also up 26%, beating estimates of $4.90 (about 21% growth). But the guidance was the standout. For Q2 2026, Monolithic forecast revenue of $900 million at the midpoint, which would equate to growth of about 35%–36% and would be the firm’s highest growth rate since Q1 2025. That midpoint far exceeded Street estimates near $817 million (roughly 23% growth). The company did not provide explicit EPS guidance for the quarter. AI Drives Big Growth Across Key End MarketsMonolithic’s results were strong across most of its key end markets. Communications revenue rose 55.5% YOY to 13.9% of total sales. Enterprise Data — which covers power-management solutions for AI and servers — jumped 97.7% YOY and is now the company’s largest end market at 32.7% of sales. Automotive increased 5.1% YOY and Industrial grew 14.2% YOY, representing 18.9% and 6% of revenue, respectively. By contrast, Storage and Computing declined 7.5% YOY and Consumer fell 4.2% YOY, accounting for 21.7% and 6.8% of total revenue. Overall, strength in the company’s bigger end markets more than offset weakness in smaller ones, and no single end market makes up more than one‑third of sales — a sign of decent diversification. AI demand is clearly the dominant catalyst. For 2026, Monolithic projects Enterprise Data sales will rise by at least 85% YOY. That is a meaningful increase from the company’s prior floor of 50%, which itself had been raised from earlier expectations of 30%–40%. The Communications end market is also linked to AI. Revenue there rose 33% compared with Q4 2025, driven by power solutions for optical modules and switches. Monolithic supplies modules for optical transceivers, a rapidly growing segment of AI networking equipment. One analyst asked whether Communications could grow as fast as, or faster than, Enterprise Data; CEO Michael R. Hsing replied, "Yes," though he did not provide specific figures. The prospect of multiple end markets growing 85% or more in 2026 is an encouraging sign. Analysts Boost Targets Significantly After the ReportThe MarketBeat consensus price target for Monolithic sits near $1,600, implying minimal upside from current levels. However, price targets shifted materially after the Q1 report. Among analysts who updated targets (and for whom MarketBeat had prior data), the average target rose about 29% — a sizable move that contrasts with the modest post‑earnings pullback in the share price. Across all new price targets issued after the results, the average was roughly $1,793, a substantial increase over the prior consensus. That updated average implies roughly 15% upside in the shares. Monolithic’s recent financial performance is impressive, but the stock’s valuation is rich. Continued execution and sustained demand would leave room for further gains; conversely, any slowdown in demand or missteps in execution could trigger a sharp pullback after the company’s rapid run-up. |
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