Wall Street Thinks Monolithic Power Is a Buy. Here’s Why It Might Be Right.

Monolithic Power Systems (MPWR) just picked up another vote of confidence. GF Securities recently initiated coverage of the stock with a “Buy” rating and a $1,706 price target, which is well above where the shares trade today. The reason comes down to one shift that keeps getting bigger. AI chips need power, and Monolithic makes the parts that deliver it. Basically, every new generation of AI chip, from Nvidia’s (NVDA) older models to its upcoming ones, draws far more electricity than the last. That power has to be delivered cleanly and precisely, right next to the chip, or performance suffers. Monolithic designs those power components. In other words, as AI chips get hungrier, each one needs more of Monolithic’s parts, at a higher value per chip. The company essentially sells more with every step up in AI computing power.

The Numbers Are Already Showing It