Monolithic Power Outlook - Navigating Weak Technicals and Mixed Analyst Sentiment

Market Snapshot

Headline Takeaway: Monolithic Power (MPWR.O) faces a challenging near-term outlook with weak technical signals and mixed analyst sentiment, despite strong underlying fundamentals.

News Highlights

1. Semiconductors ETF SOXX Sees $750M Net Outflow: A major outflow from the US Semiconductors ETF in May 2025 suggests broader sector weakness, which could indirectly impact MPWR, especially if the market reallocates capital away from tech-related assets.

2. Rare Earths and Semiconductors Cooperation Between US and Japan: New proposals for joint efforts between the US and Japan could help diversify supply chains and reduce dependence on China. This is a long-term positive for the sector, though near-term impact on MPWR remains uncertain.

3. NVIDIA in the Spotlight: Several articles analyzing NVIDIA's competitive position in the semiconductor space indirectly highlight MPWR's role in the broader industry. While NVIDIA dominates headlines, MPWR's focus on power ICs remains critical in niche but growing markets.

Analyst Views & Fundamentals

Recent analyst activity for MPWR shows a simple average rating of 4.10 and a performance-weighted rating of 3.71. However, ratings are inconsistent, with "Strong Buy" and "Neutral" ratings both appearing. The stock is currently down by 1.29%, suggesting that the market may not be aligning with the positive ratings.

• Net profit attributable to parent company shareholders / Net profit: 100.0% – Internal diagnostic score: 1/10 (very weak indicator)
• EV/EBIT: 83.14 – Internal diagnostic score: 1/10 (weak)
• Net cash flow from operating activities per share (YoY growth rate): 29.13% – Internal diagnostic score: 2/10 (neutral)
• Total profit (YoY growth rate): 53.17% – Internal diagnostic score: 3/10 (moderate)
• Cash-MV: -0.84% – Internal diagnostic score: 2/10 (neutral)
• Interest coverage ratio: -88.81% – Internal diagnostic score: 1/10 (weak)

While some fundamental factors remain strong, the overall mixed signals from both fundamentals and analyst ratings suggest a cautious approach for investors.

Money-Flow Trends

Fund flows for MPWR are a mixed picture. The overall inflow ratio stands at 51.68%, indicating relatively positive sentiment from market participants. Large institutional players (block traders) are showing positive interest with a block inflow ratio of 51.86%. However, flows from smaller retail investors are more muted, with small inflow ratio at 49.87%.

This suggests that while big money is showing some confidence, retail participation is tepid. If large funds continue to build positions, this could eventually drive broader participation and price momentum.

Key Technical Signals

The technical outlook for MPWR is weak, with 4 bearish indicators and 0 bullish signals over the past five days. The technical score is a very low 1.9/10, suggesting a high risk of further downside.

• MACD Death Cross: Internal diagnostic score: 1/10 – a bearish reversal signal.
• Marubozu White: Internal diagnostic score: 1/10 – another bearish pattern indicating a strong sell-off.
• WR Overbought: Internal diagnostic score: 2.04/10 – signals overbought conditions, which can lead to a pullback.

Recent chart activity on August 26 and August 28 showed both the Marubozu White and MACD Death Cross patterns, reinforcing the bearish narrative.

Overall trend evaluation: “Technical indicators show that the market is in a weak state, and we need to pay attention to the risk of decline.”

Conclusion

Monolithic Power is currently facing a mix of bearish technical signals, mixed analyst ratings, and tepid retail interest. While its fundamentals include strong profit and cash flow growth, the recent price decline and weak momentum indicators suggest a cautious outlook.

Investors should consider waiting for a clearer breakout or earnings catalyst before committing new capital. For now, the risk-reward balance appears tilted toward caution.