Monolithic Power Surges in 2025—Time to Buy or Hold?
Many semiconductor stocks have seen their shares soar in 2025. Among them, Monolithic Power Systems (NASDAQ: MPWR) has taken its fair share of the spoils. As of the Nov. 11 close, the stock has delivered a total return of nearly 62% on the year. That rally is even more striking given the volatility the stock faced just a year ago, when shares plunged almost 40% following reports that NVIDIA (NASDAQ: NVDA) would cut demand for Monolithic’s power chips used in its next-gen Blackwell servers.
Yet, since being flagged as an opportunity by MarketBeat on Nov. 18, 2024, Monolithic has bounced back with a 68% total return, signaling investor confidence in the company’s ability to rebound.
Below, we’ll provide an updated outlook on Monolithic Power Systems, given the huge recovery in its share price. Does the stock still represent a strong semiconductor play, or has Monolithic’s valuation now gotten ahead of itself?
MPWR Posts Strong Beats, but High Expectations Send Shares Down
Monolithic reported solid Q3 2025 earnings on Oct. 30. Revenue grew by nearly 19% to $737 million, beating estimates of $721 million and representing approximately 16% growth. The company’s adjusted earnings per share of $4.73 also impressed and beat estimates of $4.62.
Monolithic experienced slight margin pressure in Q3, with both gross and operating margins dipping by about 30 basis points. Still, both metrics have consistently remained at strong levels across recent quarters.
The company’s Q4 revenue guidance of $730 million to $750 million also came in ahead of Wall Street expectations.
Despite solid numbers and guidance, shares fell nearly 8% on Oct. 31, and are down more than 12% overall since the report. This suggests that markets were hoping for even more than the company delivered.
Diversified Revenue Base Helps Offset NVIDIA Declines
What makes Monolithic’s 2025 rally particularly impressive is how well the company has weathered early-year headwinds. The drop in Enterprise Data revenue due to NVIDIA’s shifting needs significantly hurt first-half performance, yet Enterprise Data only represents 33% of total sales.
Monolithic's broad market exposure has proved to be a strength. Here are the growth rates in Q3 for Monolithic’s five other end markets, in order of overall size:
- Storage and Computing: 30%
- Automotive: 36%
- Communications: 11%
- Consumer: 12%
- Industrial: 25%
Clearly, Monolithic is growing just fine outside of Enterprise Data, a testament to its diversified model. Additionally, Enterprise Data returned to growth in Q3, rising 4%, with the company stating that it expects Enterprise Data to grow by 30%-40% in 2026.
Longer term, Monolithic is on NVIDIA’s shortlist of silicon providers for its 800-Volt Direct Current (800 VDC) data center power infrastructure. The ramp is expected to span 2027-2028 and represents a major long-term growth catalyst for the company.
Recent Targets See Substantial Upside Potential in MPWR
The consensus price target for Monolithic stands at approximately $1,047, which suggests that shares could rise by around 10%. While this isn’t a huge amount of upside potential, it is considerably more bullish than targets from before the earnings release.
Among analysts who issued updates after the company’s Oct. 30 earnings report, the average target is just over $1,187. This figure implies a 24% upside potential, more than double the consensus target.
There are still concerns, notably the small drop in Q3 free cash flow (FCF), which fell by $1 million to $197 million. But this appears to be due to temporary accounting fluctuations, not operational issues.
Over the last three quarters, the company has generated around 94% of the FCF it generated in all of 2024, putting it on pace to see strong full-year FCF growth to support the rise in shares.
Monolithic stock may not be the bargain that it once was, but the long-term outlook for this stock still remains solid.
As technology improves across many sectors of the economy, the firm’s power solutions are well-positioned to attract demand.
With a solid financial base, strength across multiple end markets, and the prospect of significant new revenue from NVIDIA and 800 VDC infrastructure, Monolithic Power Systems remains a compelling semiconductor play.
Learn more about MPWR
