MPWR Stock Forecast & Price Target

Monolithic Power Systems (MPS) demonstrates a strong financial outlook, highlighted by a 25.7% year-over-year revenue growth in its industrial segment, supported by increased demand for factory automation and modular power solutions. The company projects long-term revenue growth of approximately 20%, coupled with successful entries in multiple growth markets, including communications and server CPU power management, which are expected to further bolster revenue. Additionally, the introduction of new products, including eMotion solutions, is anticipated to enhance MPS's total addressable market (TAM) and accelerate overall topline growth.

Monolithic Power Systems faces several fundamental risks that contribute to a negative outlook on its stock, including the potential failure to achieve projected growth rates of 15-20% due to disappointing new datacenter platforms and a sluggish product ramp-up that could negatively affect profit margins. The company is also experiencing a flat non-GAAP gross margin of 55.5%, which reflects a lack of improvement in profitability despite prior expectations, and anticipates a decline in revenue both sequentially in Q4 2025 and potentially beyond. Additionally, increasing competition poses a risk of market share loss and pressure on profit margins, while adverse global macroeconomic conditions, particularly in China, could further exacerbate declines in sales and earnings.