Monolithic Power Systems, Inc. (MPWR): Loop Upgrades to Buy with $660 Target, Citing AI Growth and Nvidia Partnership

Monolithic Power Systems, Inc. (MPWR) has emerged as a standout player in the power management solutions sector, with a particular focus on artificial intelligence (AI) and a strategic partnership with Nvidia. This article explores the compelling investment case for MPWR, highlighting its growth potential, competitive advantages, and the significance of its partnership with Nvidia.

MPWR's power management solutions are well-positioned to cater to the increasing power demands of Nvidia's AI platforms. As AI workloads grow more complex and demanding, MPWR's advanced power analog chips, sub-systems, and modules are crucial for Nvidia's AI accelerator chips, ensuring efficient power delivery and thermal management. With Nvidia's upcoming Blackwell platform launch, MPWR stands to gain from the increased demand for power management solutions, as Blackwell has more demanding power requirements than its predecessor.



MPWR's partnership with Nvidia is a significant competitive advantage in the AI sector. Nvidia's upcoming Blackwell platform launch, which has increased power requirements, benefits MPWR as it provides power management solutions for Nvidia GPUs. KeyBanc analysts expect MPWR to maintain over 80% share on NVDA Hopper/Blackwell platforms in power, highlighting the strength of this partnership. This alliance ensures a steady stream of high-margin business for MPWR, driving growth and solidifying its position in the AI sector.



MPWR's integration with Nvidia's AI roadmap and pipeline is a significant driver of its long-term growth prospects. Rosenblatt Securities analyst Hans Mosesmann raised MPWR's price target to $750, citing a substantial power analog AI roadmap/pipeline filling in the power analog AI sector. This cyclical analog with an embedded bottom visible in the first half of 2024 is attributed to MPWR's deep and sustained relationship with Nvidia and other AI accelerator chip players. The company's SoC AI industry design momentum assures a strong multi-year dynamic, requiring more sophisticated power analog and liquid cooling techniques.

MPWR's relationship with other AI accelerator chip players complements its partnership with Nvidia. Rosenblatt Securities analyst Hans Mosesmann highlighted this, stating that MPWR's power analog chips, sub-systems, and/or modules are crucial for these AI chip players. This diverse portfolio of partnerships ensures a strong multi-year dynamic, as MPWR's sophisticated power analog and liquid cooling techniques are in high demand in the SoC AI industry.

In conclusion, Monolithic Power Systems, Inc. (MPWR) is well-positioned to capitalize on the growing AI market, driven by its strategic partnership with Nvidia and its advanced power management solutions. With a compelling investment case supported by data and industry trends, MPWR is an attractive opportunity for investors seeking exposure to the AI sector. As the company continues to grow and solidify its position in the AI sector, its stock price is expected to rise, with a target of $660.