Key Highlights

  • MPWR closed at $1,380.62 on Sep. 22, up 8.06%, its fifth straight gain and about 21% above its Sep. 15 close.
  • The Sep. 9 GlobalFoundries agreement adds 300mm capacity in Singapore from early 2027; no financial terms were disclosed.
  • Q2 Revenue hit a record $980.6 million (+47.6% YoY), and MPS guided Q3 revenue to $1.14-$1.16 billion.
  • Even after the rally, shares remain about 19% below their 52-week high of $1,714.09 but are up more than 52% year to date, trading at more than 80 times trailing earnings.

Monolithic Power Systems (NASDAQ:MPWR) has now closed higher for five straight sessions, and the run has been sharp. The stock ended Tuesday, Sep. 22, at $1,380.62, up 8.06% on the day, after closing at $1,142.46 on Sep. 15. That is a five-session gain of roughly 21%, and Tuesday's Volume of about 1.45 million shares was well above the stock's average of roughly 862,000.

What is harder to pin down is why. The long-term Manufacturing agreement with GlobalFoundries (NASDAQ:GFS) was announced on Sep. 9, a full week before the streak began, and the stock actually slipped on Sep. 9 and Sep. 10. Neither the company nor regulators published any new disclosure between Sep. 16 and Sep. 22 that clearly explains the move. The precise trigger for the rally is therefore not clearly identifiable. Market commentary has instead pointed to a group of supportive factors: the GlobalFoundries capacity deal, a Buy initiation from StoneX (NASDAQ:SNEX) earlier in the month, the record second-quarter results and guidance issued on July 30, and continued investor appetite for companies that Supply power to AI data centers.

Even after the rally, the shares remain about 19% below their 52-week high of $1,714.09. They are up more than 52% year to date.

Inside the GlobalFoundries Singapore Agreement

GlobalFoundries and MPS signed a long-term manufacturing agreement that will deploy MPS's proprietary process technology at GlobalFoundries' advanced 300mm fab in Singapore, according to the joint release issued on Sep. 9. The companies said the collaboration will expand manufacturing capacity for power management products serving high-growth markets from early 2027.

MPS is a fabless company, so it relies on outside foundries while developing its own process technologies. The release said products made in Singapore are expected to include next-generation power solutions for automotive architectures, industrial robotics and automation, and smart power stages for AI and cloud infrastructure. Deming Xiao, MPS's executive vice president of global operations, said the Partnership lets the company extend its reach in electrification and AI markets with improved supply assurance. Pradip Singh, GlobalFoundries' chief manufacturing officer, described the agreement as a sign of the foundry's ability to take customers' technologies into high-volume production. No financial terms were disclosed.

For investors, the main significance is capacity and supply resilience. MPS gains an additional 300mm production source at a time when Demand for Data Center power is growing quickly. The benefit, however, is not expected to show up in results until 2027.

Record Second Quarter and a $1.1 Billion-Plus Guide

The fundamental backdrop is strong. In its July 30 results, disclosed in an 8-K filing, MPS reported record second-quarter revenue of $980.6 million, up 21.9% from the first quarter and 47.6% from a year earlier. GAAP gross Margin was 55.2%, GAAP Operating Margin was 31.0%, and GAAP Net Income was $257.3 million, or $5.22 per diluted share. On a non-GAAP basis, net income was $320.1 million, or $6.50 per share.

Enterprise Data was the standout end market. Revenue there reached $380.6 million, up 44.8% sequentially and 164.3% year over year, making it 38.8% of total sales. The company said all of its end markets grew sequentially. Internal inventory fell to 140 days from 157 days in the first quarter, and cash, cash equivalents and short-term investments totaled about $1.41 billion.

For the third quarter, MPS guided revenue of $1.14 billion to $1.16 billion, with GAAP gross margin of 55.2% to 55.8%. The board also added $500 million to the share repurchase authorization, bringing it to $1 billion. On Sep. 10, the company declared a quarterly Dividend of $2.00 per share, payable Oct. 15 to holders of record on Sep. 30.

Where MPS Fits in the AI Power Chain

MPS designs DC-to-DC converters, power modules and related chips that regulate voltage inside servers, cars, industrial equipment and consumer devices. AI accelerators draw large and fast-changing currents, which makes efficient, compact power delivery a growing engineering priority. That is the main reason Enterprise Data has more than doubled over the past year.

The company competes with larger analog and power semiconductor makers such as Texas Instruments (NASDAQ:TXN), Infineon, Analog Devices (NASDAQ:ADI) and Renesas, as well as specialists including Vicor (NASDAQ:VICR). MPS's pitch rests on its proprietary processes and packaging, its system-level design knowledge and its fast product cycles. The GlobalFoundries deal aims to pair that technology with more manufacturing scale.

Analyst sentiment has been constructive. StoneX initiated coverage on Sep. 3 with a Buy rating and a $1,800 price target, and the average one-year analyst target sits near $1,840.

Risks Behind the Rally

  • Valuation: Shares trade at more than 80 times trailing earnings, which leaves little room for disappointment on growth or margins.
  • AI concentration: A rising share of revenue comes from data center customers whose Capital spending can change quickly. Any pause in AI infrastructure orders would hit the fastest-growing segment first.
  • Execution: Bringing proprietary processes into a new fab takes qualification work, and meaningful volume is not expected before early 2027.
  • Geopolitics and trade: MPS earns much of its revenue in Asia, so changes in export controls, tariffs or U.S.-China relations could affect demand or costs.
  • Momentum reversal: A move of about 21% in five sessions, with no clear news catalyst, can reverse just as fast.

MPWR's Next Checkpoints After the Rally

The next hard data point is the third-quarter report, expected around Oct. 29, although investors should check for the company's official date announcement. That report will show whether revenue landed in the $1.14 billion to $1.16 billion range and whether Enterprise Data kept growing sequentially. Investors will also look for fourth-quarter guidance, any update on the GlobalFoundries qualification timeline ahead of early 2027 production, and management comments on AI server power content.

Nearer term, the stock goes ex-dividend on Sep. 30 ahead of the Oct. 15 payment. Hyperscaler capital spending commentary during the October Earnings season is also likely to shape sentiment toward AI power suppliers, including MPS.