Stock Analysis | Monolithic Power Outlook - Mixed Signals Emerge as Technical Weakness Looms

Market Snapshot

Headline Takeaway: Monolithic Power (MPWR) is showing mixed signals, with strong fundamentals but deteriorating technicals suggesting caution for investors. The stock fell 1.71% recently, and our internal diagnostic score (0-10) for technical indicators stands at 2.17, indicating a weak trend.

News Highlights

• McKinsey's Tariff Insights: A recent report from McKinsey & Co highlighted how U.S. tariff policies could reshape the semiconductor supply chain, potentially impacting Monolithic Power as a player in the sector. The geopolitical uncertainty is likely to create volatility in the near term.
• Semiconductor Sustainability: A piece from Cadence explores green innovations in chip manufacturing, emphasizing the growing demand for energy-efficient semiconductors. Monolithic Power could benefit from such trends, though its recent performance suggests mixed investor sentiment.
• Japan-U.S. Cooperation: Japan announced plans to propose increased cooperation with the U.S. on rare earths and semiconductors, aiming to reduce dependency on China. This could boost the global semiconductor industry, including companies like MPWR, though near-term technical indicators suggest caution.

Analyst Views & Fundamentals

The latest analyst consensus on Monolithic Power is relatively mixed. The simple average rating score from nine institutions is 4.10, while the performance-weighted rating score is 3.71. These scores suggest a relatively neutral outlook overall, but with a slight leaning toward "Strong Buy." However, the ratings are not in strong agreement, with a distribution of 4 "Strong Buy," 3 "Buy," and 3 "Neutral" ratings from the last 20 days.

Importantly, the recent price trend has been downward (-1.71%), which does not align well with the somewhat positive weighted ratings. Analysts with the best historical performance include Melissa Fairbanks (Raymond James) with a 100% win rate and Tore Svanberg (Stifel) with a 66.7% win rate. However, some analysts like Joseph Quatrochi (Wells Fargo) show lower win rates, which may limit their influence on overall sentiment.

On the fundamental side, the model score is 4.72 (of 10), indicating reasonable but not exceptional performance. Key fundamentals include:

• Net profit attributable to parent company shareholders / Net profit: 100.00% (score 1.98).
• EV/EBIT: 83.14 (score 3.07).
• Net cash flow from operating activities per share (YoY growth rate): 29.13% (score 2.77).
• GPOA: 9.21% (score 3.88).
• Cash-MV: -0.84 (score 3.45).

These fundamentals suggest Monolithic Power remains in a stable position, but its recent technical signals raise concerns about a potential pullback.

Money-Flow Trends

The latest fund-flow data reveals an overall positive trend, with a fund-flow score of 7.63 (of 10). Large and extra-large investors are showing particular interest, with inflow ratios above 51.7%. This suggests strong institutional confidence. However, the small-investor trend is negative, with a 49.7% inflow ratio, indicating some caution from retail traders.

The block trend is also positive, with an inflow ratio of 52.04%, further signaling that big-money players are entering or adding to positions. This contrasts with the recent price drop, suggesting that long-term investors might be seeing value in the stock at lower levels.

Key Technical Signals

The technical analysis of Monolithic Power is bleak, with an internal diagnostic score (0-10) of 2.17 and a total of 4 bearish indicators versus 0 bullish ones. The most concerning patterns include:

• MACD Death Cross: This is a bearish signal with an internal diagnostic score of 1.0.
• Piercing Pattern: A bearish reversal pattern with an internal diagnostic score of 1.0.
• Marubozu White: Another bearish signal with an internal diagnostic score of 1.0.

Recent technical events over the last five days include:

• 2025-08-28: MACD Death Cross formed.
• 2025-08-26: Marubozu White pattern observed.
• 2025-08-27: WR Overbought and MACD Golden Cross occurred, but the latter is seen as neutral.

Overall, the trend is weak, with clear bearish dominance. Investors are advised to avoid or closely monitor the stock until more bullish signals emerge.

Conclusion

Monolithic Power is in a transitional phase, with solid fundamentals but increasingly bearish technicals. While institutional investors are showing some confidence through inflows, the recent price drop and technical indicators suggest caution. We recommend considering waiting for a pull-back before entering new long positions, as the current trend does not offer a favorable risk-reward ratio.