What Happened?
Shares of power management chips maker Monolithic Power Systems (NASDAQ: MPWR) jumped 2.6% in the afternoon session after it received positive attention from analysts, including an upgrade from Wolfe Research and a significant price target increase from Oppenheimer.
The upgrade came from Wolfe Research, which changed its rating on the stock from "hold" to "strong-buy." In a separate move, Oppenheimer raised its price target on the company to $1,200 from $800, while maintaining an "Outperform" rating. This optimism followed strong recent performance, with KeyBanc Capital Markets highlighting the company's substantial market share gains in Nvidia's Blackwell Ultra AI chips. The company also recently reported record quarterly revenue that surpassed forecasts.
After the initial pop the shares cooled down to $999.34, up 3.2% from previous close.
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What Is The Market Telling Us
Monolithic Power Systems’s shares are very volatile and have had 29 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 2 days ago when the stock gained 9.5% as investors grew more optimistic that an escalating trade war with China could be avoided. The stock's recovery followed a 5.1% fall during the previous trading session. That decline occurred after threats were made to impose 'massive' new tariffs on Chinese goods, which sent shockwaves through the market and caused the PHLX Semiconductor Index (SOX) to drop by 4%. The subsequent rebound in semiconductor stocks, including Monolithic Power Systems, was fueled by hopes that the trade friction would not worsen.
Monolithic Power Systems is up 68.2% since the beginning of the year, and at $999.34 per share, has set a new 52-week high. Investors who bought $1,000 worth of Monolithic Power Systems’s shares 5 years ago would now be looking at an investment worth $3,114.
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