Monolithic Power Systems: AI Stock Beat, Raised and Upgraded Post-Earnings

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.

Stocks like NVIDIA NASDAQ: NVDA and Broadcom NASDAQ: AVGO often dominate semiconductor headlines. However, one lesser-known chip stock has been powering past these two in terms of recent returns.

That stock is Monolithic Power Systems NASDAQ: MPWR, which has already surged more than 70% in 2026. Meanwhile, NVIDIA is up less than 10% this year, while Broadcom’s return sits near 20%.

One reason for Monolithic’s strong performance is the fact that energy is becoming an increasingly important consideration within data centers. GE Vernova NYSE: GEV is another stock benefiting from this dynamic, with shares up more than 60% in 2026. Monolithic makes power chips and modules, which regulate the use of energy in a variety of systems, including AI equipment.

Notably, Monolithic just reported its latest financial results on April 30, seeing a slight 2% decline the next day. Meanwhile, Wall Street analysts boosted their price targets in a big way following the release, suggesting opportunity lies ahead.

Monolithic’s Q1: 2 Beats and Stellar Guidance

In Q1 2026, Monolithic posted revenue of $804 million, an increase of 26% year over year (YOY). This was considerably better than expectations near $782 million, which implied growth of around 23%. Adjusted earnings per share (EPS) also came in strong at $5.10, rising by 26%. This beat estimates of $4.90, which called for growth of approximately 21%.

However, Monolithic’s guidance really stole the show. In Q2 2026, Monolithic forecasts revenue of $900 million at the midpoint. This would equate to growth of between 35% and 36%, and mark the firm’s highest growth rate since Q1 2025. This figure walloped estimates near $817 million, which implied growth of just 23%. Monolithic did not provide explicit EPS guidance.

AI Drives Big Growth Across 2 End Markets

Monolithic’s results were strong across almost all of its key end markets. Communications revenue increased by 55.5% YOY, moving to 13.9% of total sales. Enterprise Data, which accounts for power management solutions in artificial intelligence (AI) and server applications, rose 97.7% YOY. This has become the firm’s largest end market, accounting for 32.7% of total sales. Automotive rose 5.1% YOY, and Industrial increased 14.2% YOY, making up 18.9% and 6% of total revenue, respectively.

Notably, Storage and Computing saw a moderate 7.5% YOY decline, and Consumer fell 4.2% YOY. They made up 21.7% and 6.8% of total revenue, respectively. Overall, the increasing revenue in the company’s strong end markets more than offsets the decline in weaker markets. Furthermore, no end market made up more than one-third of sales, a testament to the strong diversification in Monolithic’s business.

Nonetheless, AI demand is what’s driving the stock at this point, and the company provided positive statements on this front. For 2026, Monolithic projects that Enterprise Data sales will rise by at least 85% YOY. This is up significantly from the company’s past floor of 50%, which Monolithic had already raised from expectations of 30% to 40%.

The Communications end market is also tied to AI. Here, revenue rose by 33% compared to Q4 2025, a highly impressive increase in just one quarter. This was due to power solutions for optical modules and switches. Monolithic provides modules for optical transceivers, a type of AI networking equipment seeing a precipitous rise in demand. Notably, one analyst asked whether Communications revenue could grow as fast, if not faster, than Enterprise Data.

CEO Michael R. Hsing responded, "Yes," but did not provide any concrete numbers. Still, the prospect that Monolithic could have multiple end markets grow by 85% or higher in 2026 is a very encouraging sign.

Analysts Boost Targets Big-Time After Monolithic’s Report

The MarketBeat consensus price target on Monolithic sits near $1,600, a figure that implies very minimal upside in shares. However, it's worth examining how price targets shifted after the results.

Among analysts issuing updates for which MarketBeat previously had price target data, the average target rose by 29%. That is a very significant move and contrasts greatly with the moderate sell-off that shares experienced.

Among all price targets issued after the results, the average target was approximately $1,793, a substantial increase over the consensus. This updated average implies upside in shares to the tune of around 15%.

It’s difficult to argue with the fantastic financial performance this company is seeing. Still, the stock’s valuation is far from cheap. Should Monolithic continue to deliver strong results, there is still potential in this name. However, a slowdown in demand or lapse in execution could lead to a significant down move, with the stock already having surged so drastically.