Stock Analysis | Monolithic Power Outlook - A Stock in Technical Distress Despite Strong Fundamentals

Market Snapshot

Monolithic Power (MPWR) is underperforming technically with a weak score and bearish signals dominating. While fundamentals show some strength, recent technical patterns suggest caution for investors.

News Highlights

The semiconductor industry is in the spotlight with recent developments that could affect Monolithic Power:

• McKinsey’s research on US tariffs highlights potential disruptions to the sector, which could impact MPWR’s operations.
• Japan’s proposed cooperation with the US on rare earths and semiconductors may provide a long-term tailwind for global players like MPWR.
• Intel and AMD alumni launching AI semiconductor startups in India point to a growing and competitive landscape, which could pose both opportunities and threats.

Analyst Views & Fundamentals

Analysts are generally bullish on MPWR in the short term, but their historical performance varies widely:

• Average (simple mean) rating score: 4.10
• Performance-weighted rating score: 3.71
• Rating consistency: Mixed — there are differences among analysts, with four “Strong Buy” ratings and three “Neutral” ratings in the last 20 days.
• Price trend alignment: The current price is up by 0.16%, and the weighted expectations match the recent rise, suggesting some optimism in the market.

On the fundamental side, MPWR has mixed signals:

• Net profit attributable to parent company shareholders / Net profit: 100.0% (score: 2.0) — strong but with low confidence in its predictive power.
• Total profit (YoY growth rate): 53.17% (score: 2.0) — impressive growth, but again with lower confidence.
• Net cash flow from operating activities per share (YoY growth rate): 29.13% (score: 3.0) — decent cash flow, slightly above average.
• Net profit attributable to parent company shareholders (YoY growth rate): 38.68% (score: 2.0) — showing growth, but with room for improvement.

Money-Flow Trends

Monolithic Power is seeing positive inflows from big-money players:

• Large and extra-large investors have a positive trend, with inflow ratios of 0.50 and 0.53 respectively.
• Overall inflow ratio: 0.52 — indicating that more capital is flowing in than out.
• Small investors are showing a negative trend, with an inflow ratio of only 0.49.

The fund-flow score of 7.46 (internal diagnostic score 0-10) suggests strong institutional interest, but retail investors appear cautious.

Key Technical Signals

Technically, Monolithic Power is in a weak position:

• MACD Death Cross (score: 1.00) — a bearish signal indicating a long-term trend reversal is likely.
• Marubozu White (score: 1.00) — a strong bearish pattern that suggests a continuation of the downtrend.
• Piercing Pattern (score: 1.00) — another bearish signal that indicates a breakdown in support levels.

Recent chart patterns include:

• 2025-08-21: MACD Death Cross
• 2025-08-26: Marubozu White
• 2025-08-28: MACD Death Cross again

These signals align with the technical score of 1.72 (internal diagnostic score 0-10) and the overall trend of weakness. The model recommends avoiding MPWR at this time due to the overwhelming number of bearish indicators.

Conclusion

While Monolithic Power has strong fundamentals with several positive factors, the technical outlook is deeply bearish. With a low technical score and multiple negative signals, now may not be the right time to enter or add to a position. Investors should consider waiting for a potential pull-back and monitor the stock for signs of a reversal in the coming weeks.