Stock Analysis | Monolithic Power Outlook - Technical Weakness Overshadows Mixed Analyst Sentiment

Market Snapshot

Headline: Monolithic Power is facing a weak technical setup with internal diagnostic scores (0-10) of 2.73, suggesting traders should avoid this stock at this time.

News Highlights

Recent news items highlight both challenges and opportunities for the semiconductor sector. A McKinsey analysis on tariffs and chip supply chains underlines potential disruptions to global semiconductor operations, which could impact Monolithic Power's market exposure. Meanwhile, Japan's proposed cooperation with the U.S. on rare earths and semiconductors may offer long-term stability to the industry. However, indie Semiconductor's poor financial performance, including a negative ROIC of -18.68%, underscores the competitive pressures within the sector.

Analyst Views & Fundamentals

• Average rating score (simple mean): 4.10
• Weighted rating score (performance-weighted): 3.71
• Rating consistency: Dispersed, with ratings ranging from "Strong Buy" to "Underperform."
• Price trend alignment: Analyst expectations are mismatched with the current price decline (-0.32%), suggesting uncertainty among experts.

On the fundamental front, key factors include:

• Net profit attributable to parent company shareholders / Net profit: 100.0% (internal diagnostic score: 1.00)
• Total profit (YoY growth rate): 53.17% (internal diagnostic score: 3.00)
• CFOA (Cash flow from operating activities): 5.98% (internal diagnostic score: 4.00)
• GPOA (Gross profit operating activities): 9.21% (internal diagnostic score: 4.00)
• Cash-MV (Cash vs. market value): -0.84% (internal diagnostic score: 2.00)

These mixed signals suggest Monolithic Power is growing profit-wise but still faces cash flow and operational challenges.

Money-Flow Trends

Big-money flows remain mixed, with large institutional investors showing a 0.4898 inflow ratio (negative trend), while retail and small investors have a 0.4939 inflow ratio (also negative). The overall fund-flow score is 7.53, labeled "good," suggesting that despite the negative trends, there is still some positive movement in the stock, particularly among large investors (Large inflow ratio: 0.5225, positive trend). However, the extra-large and small flows are dragging the overall momentum down.

Key Technical Signals

From a technical standpoint, Monolithic Power has several bearish signals in the short term:

• MACD Death Cross: Score of 1.00 (internal diagnostic score). This historically has led to an average return of -3.93% over 7 signals.
• WR Overbought: Score of 2.08 (internal diagnostic score), indicating a neutral rise, with an average return of -0.53% over 46 signals.
• Piercing Pattern: Score of 1.00 (internal diagnostic score), a bearish signal with an average return of -1.52% over 1 signal.

Notably, the Bearish Engulfing pattern stands out with a strong bullish score of 6.83 (internal diagnostic score), showing potential for a reversal, but it was recorded on 2025-08-15 and may have been offset by more recent bearish signals.

Recent indicators by date:

• 2025-08-21: MACD Death Cross (bearish)
• 2025-08-18: WR Overbought and Piercing Pattern (bearish)
• 2025-08-15: Bearish Engulfing (bullish)
• 2025-08-14 and 2025-08-13: WR Overbought (neutral to bearish)

This pattern shows that bearish signals have been dominant in the past five trading days.

Key technical insights: Bearish signals are clearly dominant (3 bearish vs. 0 bullish), and the overall trend remains weak. Investors are advised to monitor the stock closely and consider avoiding it until a clearer bullish setup emerges.

Conclusion

Monolithic Power's internal diagnostic score of 2.73 and weak technical signals suggest it is best to wait for a more favorable entry point. Analysts are divided, and while some factors show growth, others highlight operational and cash flow pressures. Investors should consider waiting for a pull-back and keep a close eye on both technical and fundamental developments in the coming weeks.