Monolithic Power Outlook - Mixed Signals as Technicals Deter, Fundamentals Improve

Market Snapshot

Headline: Mixed signals cloud Monolithic Power’s near-term outlook – while fundamentals show improvement with a score of 4.31, technical indicators signal a weak trend, urging caution.

News Highlights

1. Global chip policy shifts under scrutiny – A McKinsey report on U.S. tariff policies and their impact on semiconductor supply chains highlights growing geopolitical uncertainty, which could affect MPWR’s export markets.

2. Green semiconductors take center stage – Cadence’s sustainable semiconductor innovation efforts underline a broader industry trend, which MPWR must address to maintain competitiveness in a carbon-conscious market.

3. ETF outflows signal caution – The Semiconductors ETF (SOXX) faced a $750M outflow in May, which may signal investor wariness, potentially affecting MPWR’s liquidity and volatility in the near term.

Analyst Views & Fundamentals

Monolithic Power has drawn 9 active analysts, with a simple average rating of 4.10 and a performance-weighted rating of 3.71. While most ratings align with the recent price trend of 0.85% rise, the ratings are not entirely consistent—4 "Strong Buy", 3 "Buy", and 3 "Neutral" reflect a mixed outlook.

Key fundamental indicators include:

• Operating cash flow per share (YoY): $29.13 – strong growth, contributing to the 4.31 overall score.
• Net profit growth (attributable to parent company, YoY): 38.68% – a positive sign for future earnings power.
• Total profit growth (YoY): 53.17% – highlights robust business expansion.
• EV/EBIT ratio: 83.14 – high valuation, but supported by strong earnings.
• Interest coverage ratio: -89.01% – a red flag, suggesting potential financial stress.

Money-Flow Trends

Big-money and retail investors are showing diverging trends. While retail inflow remains positive (Small_trend: 50.18%), large institutional flows are mixed:

• Large investors are seeing a negative trend (Large_trend), with 49.31% inflow ratio.
• Extra-large investors are in positive territory (54.05% inflow ratio), suggesting a potential reversal in sentiment.
• Overall inflow ratio stands at 52.99%, with a positive score of 7.64 (internal diagnostic score 0-10), indicating moderate optimism among large players.

Key Technical Signals

Monolithic Power's technical outlook is bleak, with a 1.9 score (internal diagnostic score 0-10) and 4 bearish signals versus 0 bullish ones. Recent indicators include:

• WR Overbought (score: 2.04): Suggests overvaluation, with an average return of -0.62%.
• MACD Death Cross (score: 1): A bearish crossover, with a historical win rate of just 25%.
• Marubozu White (score: 1): Signals a strong bearish reversal pattern, with an average return of -3.01%.

Recent chart patterns show increasing bearish momentum, including a MACD Death Cross on 2025-08-28 and WR Overbought on 2025-09-05. The consensus is clear: momentum is weak, and the risk of a downward correction is high.

Conclusion

Monolithic Power finds itself in a mixed landscape—strong fundamentals and positive money flows are counterbalanced by clear bearish technical signals. With a 1.9 technical score and growing bearish indicators, it’s a high-risk trade. Investors are advised to consider waiting for a pull-back or look for reversal signals before committing to new positions in the near term. Keep an eye on upcoming earnings to assess whether the recent fundamentals can hold up against the technical headwinds.