We remain buy-rated on Monolithic Power Systems, Inc. in 2H24 and 2025. Our positive thesis of AI-related tailwinds offsetting lackluster demand from other business lines remains in play into 2025. We're not too bothered by the higher multiple, as we believe MPWR is uniquely positioned to match growth expectations that the market is pricing in.
Monolithic Power has been a long-time market-beating investment. Its business model has helped it excel, and the rise in data centers' power needs has been a quick add-on to Monolithic's leading power chip portfolio.
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Monolithic (MPWR) reported earnings 30 days ago. What's next for the stock?
Monolithic Power Systems is a solid investment for exposure to AI and electrification megatrends, which should generate 3x returns by 2030. MPS has a competitive advantage in efficiency and miniaturization, with a large patent portfolio and ability to play in diverse markets. The Company has consistently expanded revenue and net income, outperforming competitors and doubling net income margin in 10 years. Furthermore, MPS is debt-free.
Monolithic leads in power chip design, with a strong focus on data center applications. Pure Storage offers significant space-saving and energy-efficient benefits for clients.