Stock Analysis | Monolithic Power Outlook - Mixed Signals Amid Key Fundamentals

Market Snapshot

Headline Takeaway: Monolithic Power is showing strong inflows and positive price momentum, but technical indicators suggest caution. The stock is currently up 3.33% over the last month, while internal diagnostic scores for technical strength stand at a weak 1.72 out of 10.

News Highlights

• McKinsey Report on Tariffs – A new analysis from McKinsey explores the potential impact of U.S. tariffs on semiconductor supply chains. This could create uncertainty in the sector, including for companies like Monolithic Power, which relies on global manufacturing and trade networks.
• Japan-U.S. Cooperation on Rare Earths – Japanese officials have proposed increased collaboration with the U.S. on rare earths and semiconductors, potentially addressing supply chain risks. This development might offer some support for semiconductor firms like MPWR in the long run.
• AI Chip Startups in India – Recent reports highlight a surge in AI semiconductor startups in India, driven by talent from companies like Intel and AMD. While this is positive for the broader industry, it may introduce more competition for firms like Monolithic Power in the long term.

Analyst Views & Fundamentals

Analysts have shown a mixed but generally positive stance on Monolithic Power. The simple average rating is 4.10, while the performance-weighted average is 3.71. The ratings are somewhat dispersed, with 4 "Strong Buy" and 3 "Buy" ratings out of 10 total. These positive signals align with the recent price rise of 3.33%, suggesting market expectations are reasonably matched by current performance.

Key Fundamental Factor Values

• Net Cash Flow from Operating Activities per Share (YoY growth rate): 29.13% (Internal diagnostic score: 2.00)
• Net Profit Attributable to Parent Company Shareholders / Net Profit: 100.00% (Internal diagnostic score: 1.00)
• Net Profit Attributable to Parent Company Shareholders (YoY growth rate): 38.68% (Internal diagnostic score: 3.00)
• Net Profit Margin (NPM): 20.12% (Internal diagnostic score: 4.00)
• Cash-MV: -0.84 (Internal diagnostic score: 2.00)

Money-Flow Trends

Monolithic Power has seen strong inflows across all investor categories. The overall inflow ratio is at 53.77%, indicating that more than half of all trading is happening on the buy side. Larger institutional and extra-large investors are particularly active, with inflow ratios of 50.26% and 54.92% respectively. This suggests that big-money investors are more confident in MPWR than retail traders, whose inflow ratio is 50.01%.

Key Technical Signals

The technical outlook is weak, with an internal diagnostic score of 1.72 and 5 bearish indicators currently active. Notable signals include:

• MACD Death Cross (Score: 1.00) – A bearish divergence suggesting a trend reversal or continued weakness.
• Marubozu White (Score: 1.00) – A long-bodied candle indicating a strong move lower without hesitation.
• Piercing Pattern (Score: 1.00) – Another bearish reversal pattern observed in recent candlestick data.

Recent chart patterns include multiple instances of the MACD Death Cross and Marubozu White across the past five days, which reinforces the bearish bias. The overall trend is weak, with no bullish signals active, and market participants are advised to avoid or closely monitor the stock for further deterioration.

Conclusion

Monolithic Power is in a tricky position: fundamentals remain solid with strong profit growth and inflows, but technical indicators paint a bearish picture. With the stock up 3.33% and internal technical scores at just 1.72, investors may want to consider a wait-and-watch approach for now. A pullback or a positive earnings surprise might offer a more compelling entry point. For now, caution is warranted given the lack of bullish momentum and strong bearish signals on the chart.