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Sunday's Bonus News
Monolithic Power Systems: AI Stock Beat, Raised and Upgraded Post-EarningsWritten by Leo Miller. Date Posted: 5/5/2026. 
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.
- Special Report: Elon Musk’s $1 Quadrillion AI IPO
Stocks like NVIDIA (NASDAQ: NVDA) and Broadcom (NASDAQ: AVGO) often dominate semiconductor headlines. However, one lesser-known chip stock has been outperforming both in recent months. That stock is Monolithic Power Systems (NASDAQ: MPWR), which has already surged more than 70% in 2026. By comparison, NVIDIA is up less than 10% this year, while Broadcom’s return is near 20%.
One reason for Monolithic’s strong performance is that energy efficiency is becoming an increasingly important consideration in 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 that regulate energy use in a variety of systems, including AI equipment. Notably, Monolithic reported its latest financial results on April 30, and shares slipped slightly the following day. Meanwhile, Wall Street analysts boosted their price targets substantially after the release, suggesting opportunity may lie ahead. Monolithic’s Q1: 2 Beats and Stellar GuidanceIn Q1 2026, Monolithic posted revenue of $804 million, an increase of 26% year over year (YOY). This was considerably better than expectations of nearly $782 million, which implied growth of around 23%. Adjusted earnings per share (EPS) also came in strong at $5.10, rising 26%. That topped estimates of $4.90, which called for growth of approximately 21%. However, Monolithic’s guidance really stole the show. For Q2 2026, Monolithic expects revenue of $900 million at the midpoint. That would equate to growth of 35% to 36% and mark the company’s highest growth rate since Q1 2025. The figure also easily topped estimates near $817 million, which implied growth of just 23%. Monolithic did not provide explicit EPS guidance. AI Drives Big Growth Across 2 End MarketsMonolithic’s results were strong across nearly all of its key end markets. Communications revenue increased by 55.5% YOY, rising to 13.9% of total sales. Enterprise Data, which includes power management solutions for artificial intelligence (AI) and server applications, jumped 97.7% YOY. It has become the company’s largest end market, accounting for 32.7% of total sales. Automotive revenue 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, growth in the company’s strongest end markets more than offsets the decline in weaker areas. Furthermore, no end market accounted for more than one-third of sales, a testament to the diversification in Monolithic’s business. Still, AI demand is what’s driving the stock at this point, and the company offered positive commentary on that front. For 2026, Monolithic projects that Enterprise Data sales will rise by at least 85% YOY. That is well above the company’s previous 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 33% compared with Q4 2025, a highly impressive increase in just one quarter. The growth was driven by power solutions for optical modules and switches. Monolithic provides modules for optical transceivers, a type of AI networking equipment that is seeing rapidly rising demand. Notably, one analyst asked whether Communications revenue could grow as fast as, or 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 more in 2026 is a very encouraging sign. Analysts Boost Targets Big-Time After Monolithic’s ReportThe MarketBeat consensus price target on Monolithic sits near $1,600, a figure that implies very little upside in the shares. However, it's worth looking at 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 significant move and contrasts sharply with the modest sell-off 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 of around 15%. It’s difficult to argue with the company’s fantastic financial performance. Still, the stock’s valuation is far from cheap. If Monolithic continues to deliver strong results, there may still be upside in the name. However, a slowdown in demand or a lapse in execution could lead to a meaningful pullback, especially after such a sharp run-up. |
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