Monolithic Power Outlook - A Mixed Bag for MPWR Amid Uncertain Signals

Market Snapshot

Takeaway: MPWR is weak technically and under pressure, despite mixed analyst views and steady cash flow.

Monolithic Power (MPWR) is showing a slight price decline in recent sessions, with technical indicators heavily bearish and a technical score of 1.86, signaling a weak outlook. However, the company's fundamental cash flow and profit growth remain positive, though analysts are divided on the stock's future direction.

News Highlights

1. US Semiconductors ETF Faces $750M Net Outflow

The US Semiconductors ETF (SOXX), which includes MPWR, saw a $750 million net outflow in May 2025. This suggests broader sector caution, potentially affecting MPWR as a key player in the industry. The outflow could reflect investor concerns over trade policies and the energy-intensive nature of chip manufacturing, as highlighted in recent research.

2. Rare Earth and Semiconductor Cooperation Between US and Japan

The US and Japan are reportedly working on joint proposals to strengthen supply chains for rare earths and semiconductors. This could be a positive long-term catalyst for companies like MPWR, which rely on such materials. However, near-term volatility might persist as global trade policies continue to evolve.

3. NVIDIA Dominates Sector Comparisons

Recent analyses highlight NVIDIA's strong performance against competitors in the semiconductor space. While this doesn’t directly affect MPWR, it sets a high bar for innovation and profitability in the sector, adding pressure for smaller players to keep up with the pace.

Analyst Views & Fundamentals

• Average Rating Score: 4.10 (simple mean)
• Weighted Rating Score: 3.71 (based on historical performance)
• Rating Consistency: Mixed, with recent ratings split between "Strong Buy," "Buy," and "Neutral."
• Price Trend vs. Analyst Outlook: The current price is down (-0.19%), while the average analyst rating remains cautiously positive. This mismatch suggests caution is warranted.

Key Fundamental Factors and Scores:

• Net cash flow from operating activities per share (YoY growth rate %): 29.13% (Score: 2.00)
• EV/EBIT: 83.14 (Score: 4.00)
• Gross Profit Margin (GPM): 55.08% (Score: 0.00)
• Accounts Receivable Turnover Ratio: 7.09 (Score: 4.00)
• Total Profit (YoY growth rate %): 53.17% (Score: 3.00)
• Cash Flow from Operating Activities (CFOA): $0.06 (Score: 4.00)
• Income Tax / Total Profit (%): 23.76% (Score: 2.00)
• Interest Coverage Ratio (EBIT / Interest expense): -88.74% (Score: 1.00)
• Total Assets Turnover Ratio: 0.34 (Score: 3.00)

Monolithic Power shows strong growth in operating cash flow and total profit, but the weak gross margin and negative interest coverage ratio are concerning. The overall fundamental score is 3.72 (internal diagnostic score).

Money-Flow Trends

Monolithic Power is experiencing mixed money-flow signals, with large institutional inflows but small and medium-sized retail outflows.

• Overall Inflow Ratio: 52.33%
• Large Inflow Ratio: 48.70%
• Extra-Large Inflow Ratio: 53.32%
• Small Inflow Ratio: 49.80%

Big-money players are showing a positive trend, with the block inflow ratio at 52.58%. However, small retail investors are pulling back, which could signal short-term uncertainty. The fund-flow score of 7.54 (internal diagnostic score) is positive, indicating some institutional confidence despite the mixed retail activity.

Key Technical Signals

MPWR is under bearish technical pressure, with four negative indicators and no bullish ones in the latest analysis. The technical score is 1.86 (internal diagnostic score), and the overall trend is weak.

Key Indicators and Scores:

• WR Overbought: 1.88 (internal diagnostic score) – Suggests overbought conditions are not strong for a bullish move.
• MACD Death Cross: 1.00 (internal diagnostic score) – A strong bearish signal.
• Marubozu White: 1.00 (internal diagnostic score) – Another bearish pattern, indicating a strong sell-off with no upper shadow.

Recent Chart Patterns:

• 2025-09-05: WR Overbought signal
• 2025-08-28: MACD Death Cross
• 2025-08-26: Marubozu White

These signals suggest a lack of upward momentum and potential for further downside. The key insight is that bearish signals are dominating, with 4 out of 4 indicators negative.

Conclusion

Monolithic Power faces a complex landscape with weak technical signals, mixed analyst views, and strong retail outflows. While fundamentals like operating cash flow and profit growth are positive, the bearish technical setup and mixed price trend suggest caution. Consider waiting for a pull-back or clearer positive signals before committing to new positions. Investors should monitor the evolving trade policies and sector ETF movements for further clues about MPWR's potential path.