Monolithic Power Stock Jumps 9.1% as AI Revenue Explodes

This article first appeared on GuruFocus.

Monolithic Power Systems (NASDAQ:MPWR), a semiconductor company providing power-management products, jumped approximately 9.1% in Friday's regular-session trading as of 10:19 a.m. ET after issuing stronger third-quarter revenue guidance. The company expects revenue between $1.14 billion and $1.16 billion, following record second-quarter revenue of $980.6 million. Second-quarter sales increased 47.6% from one year earlier and 21.9% sequentially.

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Enterprise Data revenue reached $380.6 million, increasing 164.3% year over year and 44.8% from the first quarter. Management attributed the sequential expansion to stronger sales of power-management solutions for AI and server applications. Enterprise Data represented 38.8% of total revenue, compared with 32.7% during the previous quarter. Non-GAAP net income reached $320.1 million, or $6.50 per diluted share, while GAAP net income totaled $257.3 million.

The $1.15 billion midpoint of third-quarter guidance is approximately $169.4 million, or 17.3%, above second-quarter revenue. That projected sequential expansion suggests AI-related power demand could continue increasing rather than representing a single-quarter improvement. The board also added $500 million to its share-repurchase authorization, increasing the total program to $1 billion. Investors may now focus on whether Enterprise Data maintains its rapid growth and whether Monolithic Power can deliver the forecast revenue while preserving its projected non-GAAP gross margin of between 55.4% and 56%.

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