By Nate Wolf
Monolithic Power Systems finished April with a bang, issuing earnings that blew past expectations and staking its claim as an essential piece of the artificial-intelligence ecosystem.
Shares slumped 3.1% to $1,565.01 on Friday in response, but analysts aren't worried. Data centers still need the power chips Monolithic makes to deliver stable energy to AI servers.
The company posted adjusted earnings of $5.10 for the first quarter, up from $4.04 a year ago and above the consensus estimate of $4.90. Revenue rose by 26% year over year to $804.2 million, surpassing Wall Street's call for $781.9 million.
Monolithic's enterprise data segment led the gains, with revenue nearly doubling from a year ago to $262.8 million.
The role of power chips and circuits in the AI boom has garnered more attention in recent months. And investors seemed to have been anticipating robust results from the chip maker, hence the stock's fall on Friday. Shares were up 78% this year and 153% over the past 12 months as of Thursday's close.
"We view this as another thesis-confirming quarter, as MPS leverages its power silicon expertise and diversified customer base to drive consistent beat-and-raise results," William Blair analyst Sebastien Naji wrote in a research note Friday.
Monolithic's guidance for the current quarter was even more impressive than its quarterly results, Naji said. The company expects year-over-year revenue growth to accelerate to around 35% in the second quarter, with a modest uptick in margins. William Blair reiterated an Outperform rating on the stock.
Perhaps the most significant factor working against Monolithic is the price. The stock now trades at 61.5 times projected 12-month earnings, up from a 33.9-times multiple a year ago.
Analysts at Truist Securities see the premium as warranted. The firm reiterated a Buy rating in a research note, lifting its price target to $1,805 from $1,396 based on a 65-times multiple of 2027 earnings. Growth is accelerating, analyst William Stein pointed out, and the company's culture of "unencumbered innovation" is hard to bet against.
Monolithic is making investments to support $6 billion in annual revenue, well above its prior target of around $4 billion in capacity. The jump reflects confidence in the growth potential and having the supply to meet demand, said Raymond James analyst Melissa Fairbanks.
Raymond James reiterated an Outperform rating on Monolithic stock and boosted its price target to $1,800 from $1,350 in a research note Friday.
Write to Nate Wolf at nate.wolf@barrons.com
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May 01, 2026 12:15 ET (16:15 GMT)
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