Price Target Increase#
KeyBanc has raised its price target for Monolithic Power Systems (NASDAQ: MPWR) from $1,500 to $2,000 while maintaining an Overweight rating. This decision comes after the company reported strong first-quarter results and second-quarter guidance that surpassed expectations.
Strong Performance in Data Centers#
Monolithic Power Systems has seen its stock surge by 170% over the past year, currently trading at $1,614.41, close to its 52-week high of $1,661.79. The company has experienced significant growth in its Enterprise Data segment, which increased by 98% year-over-year, and Communications, which rose by 56% year-over-year. This growth is largely attributed to the demand in data centers, particularly in server CPUs and artificial intelligence (AI).
Revised Growth Outlook#
Due to increased visibility in its backlog, Monolithic Power Systems has raised its outlook for Enterprise Data growth for 2026 from 50% to 85%. The company continues to see strong growth in Communications, driven by advancements in optical and switching technologies. While Monolithic Power Systems is selectively increasing its pricing, it remains cautious about expanding its gross margins in the second half of the year.
Earnings Beat Expectations#
In its recent Q1 2026 earnings report, Monolithic Power Systems surpassed Wall Street expectations with an earnings per share (EPS) of $5.10, exceeding the forecast of $4.90. Revenue also reached $804.2 million, surpassing the anticipated $781.63 million. Following these results, Wolfe Research raised its price target for the company from $1,650 to $1,950, while also increasing its revenue and earnings estimates for 2026. They project revenue of $3.7 billion and an EPS of $23.91 for 2026, with further growth expected in 2027.