Monolithic Power Soars 11.7% on Q2 Earnings Surge: What's Fueling the Rally?

Summary
• Monolithic Power (MPWR) surges 11.7% intraday to $794.8, eclipsing 52-week high of $959.64.
• Q2 revenue jumps 31% to $664.6M, non-GAAP EPS of $4.21 beats estimates by 2.2%.
• Storage & computing segment grows 69.9% YoY, automotive revenue up 66%.

Monolithic Power’s stock is in a tailwind as Q2 results smash Wall Street estimates, with revenue and earnings surging above forecasts. The 11.7% intraday gain reflects a mix of sector strength and strategic momentum, despite a 23% decline in enterprise data revenue. With the stock trading near its 52-week high, investors are weighing technical signals and options positioning against a backdrop of diversified market exposure.

Q2 Earnings Beat Ignites Short-Term Optimism
Monolithic Power’s 11.7% rally stems from a Q2 earnings report that exceeded expectations across key metrics. GAAP revenue surged 31% to $664.6 million, with non-GAAP EPS at $4.21—$0.09 above estimates. The storage and computing segment grew 69.9% YoY to $195.3 million, while automotive revenue climbed 66% to $145.1 million. Despite a 23% decline in enterprise data revenue, the company maintained strong gross margins (55.5%) and raised third-quarter revenue guidance to $710–730 million. This performance, combined with a 15% cash reserve and strategic partnerships like its collaboration with ECARX, has energized traders ahead of the 52-week high.

Navigating the Bull Run: ETFs and Options for Momentum Traders
• 200-day MA: 661.78 (below current price), RSI: 38.89 (neutral), MACD: -2.41 (bearish divergence)
• Bollinger Bands: Price at 759.59 (upper band), 728.88 (mid), 698.16 (lower)—suggesting overbought territory.
• 30D support/resistance: 712.59–714.16; 200D: 582.08–591.84

MPWR’s technicals show a short-term bearish trend with long-term consolidation. The RSI hovering around 39 indicates a potential bounce, while the MACD histogram’s negative value suggests waning momentum. Bollinger Bands indicate the stock is near the upper boundary, a classic overbought signal. The 200-day MA remains a critical support level at $661.78.

Top Options Picks:
• MPWR20260320C810
- Type: Call, Strike: $810, Expiry: 2026-03-20
- Delta: 0.0527 (low sensitivity), Theta: -0.00648 (moderate time decay), Gamma: 0.4779 (high sensitivity to price swings)
- LVR: 158,286.06% (extreme leverage), IV: 0.04% (near-zero volatility)
- Why it stands out: The contract’s high gamma makes it responsive to price swings, though its low delta and near-zero IV suggest it’s a speculative bet for long-term holders.
- Payoff (5% upside): $24.04 per share (ST = $834.04).

• MPWR20260618C820
- Type: Call, Strike: $820, Expiry: 2026-06-18
- Delta: 0.0108 (very low sensitivity), Theta: -0.00101 (minimal time decay), Gamma: 0.0212 (low sensitivity)
- LVR: 158,286.06% (extreme leverage), IV: 0.18% (moderate volatility)
- Why it stands out: The contract’s low gamma and delta make it unsuitable for short-term trading, but its low theta could appeal to investors holding for extended periods.
- Payoff (5% upside): $14.04 per share (ST = $834.04).

Trading Insight: Aggressive bulls may consider MPWR20260320C810 if the stock tests $810, but caution is warranted given the low delta and IV. A break above $803.0 (intraday high) could trigger a retest of the 52-week high at $959.64.

Backtest Monolithic Power Stock Performance
The backtest of MPWR's performance after a 12% intraday surge shows favorable short-to-medium-term gains, with the 3-Day win rate at 54.30%, the 10-Day win rate at 59.71%, and the 30-Day win rate at 63.06%. The maximum return during the backtest period was 6.49%, indicating that such an intraday surge can lead to significant short-term profits.

MPWR’s Rally Faces Crucial Test: What to Watch Now
Monolithic Power’s 11.7% surge hinges on its ability to sustain momentum above $803.0, with the 52-week high at $959.64 as a key psychological target. Technicals suggest a short-term overbought condition, but the company’s diversified growth across storage, computing, and automotive segments provides a strong fundamental backdrop. Investors should monitor the 200-day MA at $661.78 for a potential breakdown, while options traders may eye the MPWR20260320C810 for a speculative long if volatility picks up. Sector-wise, Texas Instruments (TXN) remains a benchmark with a 0.07% intraday gain. Act now: Watch for a $803.0 close or a pullback to $712.59 support to gauge the next move.