Stock Analysis | Monolithic Power Outlook - A Cautionary Tale in a Volatile Semiconductor Sector

Market Snapshot

Headline Takeaway: Monolithic Power's technical indicators remain weak, with bearish signals dominating and suggesting caution. The stock's price has risen by 3.87% in the recent period, but this appears to be at odds with the broader trend signals.

News Highlights

• McKinsey weighs in on tariffs and chip supply chains: New research highlights the potential impact of U.S. tariffs on the semiconductor sector. This could weigh on Monolithic Power as a supplier of power semiconductors.
• Japan's rare earth cooperation plans: Japan is reportedly set to propose greater cooperation with the U.S. on rare earths and semiconductors, aiming to reduce dependence on China and address trade imbalances. This could signal a long-term boost to the industry but might not immediately affect Monolithic Power's operations.
• Intel and AMD executives launch AI chip startups: Former executives from major players are entering the AI semiconductor space, indicating strong growth potential in the sector. However, Monolithic Power does not appear to be a major player in AI chips, so the impact remains uncertain.

Analyst Views & Fundamentals

Average Rating Score: 4.10 (simple mean)

Weighted Rating Score: 3.71 (performance-weighted)

Rating Consistency: There is dispersion among analyst ratings, with 4 "Strong Buy," 3 "Buy," and 3 "Neutral" ratings in the last 20 days.

Price Trend Alignment: The current price trend is upward (3.87%), but the weighted expectations suggest a more neutral outlook.

Key Fundamental Factors:

• Net cash flow from operating activities per share (YoY growth rate %): 29.13% (internal diagnostic score: 2.94)
• Gross profit margin (GPM): 55.08% (internal diagnostic score: 1.46)
• Cash-UP: -9.61% (internal diagnostic score: 2.84)
• Net cash flow from operating activities / Total liabilities %: 86.65% (internal diagnostic score: 3.84)
• Interest coverage ratio (EBIT / Interest expense) %: -89.85% (internal diagnostic score: 2.09)

Money-Flow Trends

Big-money investors are showing positive sentiment with inflow ratios across large, extra-large, and block categories above 50%. The overall inflow ratio stands at 54.55%, while retail (small) flows remain mixed with a small trend scoring negative. This suggests institutional confidence in the stock, but retail investors are more cautious.

Key Technical Signals

Monolithic Power's technical outlook is weak, with 4 bearish and 2 neutral indicators out of 6 analyzed, yielding an overall technical score of 2.94 (internal diagnostic score: 2.94).

Recent Indicators and Patterns:

• Marubozu White (Bearish, score: 1.00): Seen on 2025-08-26, indicating a potential bearish reversal.
• MACD Death Cross (Bearish, score: 1.00): Observed on 2025-08-21, a strong bearish signal.
• Piercing Pattern (Bearish, score: 1.00): Detected on 2025-08-18, another bearish signal.

Key Insights: Technical indicators show that the market is in a weak state, and we need to pay attention to the risk of decline. Bearish signals are clearly dominant (4 bearish vs. 0 bullish).

Conclusion

With a weak technical outlook, mixed analyst ratings, and mixed fundamental signals, investors should consider waiting for a pull-back before entering or increasing positions in Monolithic Power. Monitor the broader semiconductor market for any changes in U.S. policy or rare earth cooperation, as these could affect long-term fundamentals.