MPWR - Monolithic Power Systems: One More Good Quarter To Go

2024-05-07 04:47:15 ET

Summary

• Monolithic Power Systems reported strong Q1 FY2024 results, beating expectations, with enterprise data sales up over 200% year-over-year.
• MPS's enterprise data sales increased significantly because of AI demand and the partnership with Nvidia.
• I'm expecting MPS to continue outperforming next quarter, with management guiding for sales to increase ahead of Street estimates.
• I share my thoughts on MPS stock here and why I think it has more upside in 2024.

Investment thesis

Monolithic Power Systems ( MPWR ) reported the first quarter of 2024 since my last article on the stock and has outperformed the S&P 500 since, too. Management reported a beat on both top and bottom lines this quarter, with sales up 1% quarter over quarter and up 1.5% year-over-year to $457.89 million. My positive outlook for MPS played out this quarter, and I believe it’ll play out again in 2QFY24 because of AI, again. This quarter further proved my belief that MPS is the more resilient name to play in AI growth. The company’s enterprise data sales increased 16% quarter-over-quarter and 217% year-over-year to $149.7 million. This translates to enterprise data sales representing 32.6% of total sales this quarter, as shown in the table below, taken from MPS’ earnings press release....

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