Monolithic Power Systems' Growing AI Chip Demand Boosts Stock Outlook

Monolithic Power Systems (MPWR) has received a 'Buy' rating from GF Securities with a price target of $1,706, reflecting optimism about the company's growth due to increasing demand for AI chips. The company reported record revenue of $981 million last quarter, up 48% year-over-year (YoY), driven by its enterprise data business, which grew 45% sequentially. This segment is tied to AI and data center chips. Monolithic Power Systems is expanding beyond AI, winning new business in the automotive sector, communications equipment, and robotics. The company's valuation looks reasonable given its growth pace, with a forward GAAP price-to-earnings (P/E) of 63.16x and a forward price-to-sales (P/S) ratio of 17.01x. Monolithic Power Systems reported stronger-than-expected Q2 2026 results, with revenue of $980.6 million, up 48% YoY, and a gross margin expected to remain similar or slightly higher in the third quarter.