Monolithic Power Systems, Inc. (MPWR): A Bull Case Theory

Core Thesis - Monolithic Power Systems, Inc. (MPWR) is positioned for significant upside due to its strong presence in enterprise AI and semiconductor markets, with a projected growth of 40-50% year-over-year in the Enterprise Data segment [2][4] Financial Performance - As of September 10th, MPWR's share was trading at $855.18, with trailing and forward P/E ratios of 22.38 and 39.06 respectively [1] - The stock has appreciated approximately 52.2% since previous coverage in April 2025, indicating strong market performance [6] Market Position - MPWR has a history of disciplined execution and is gradually gaining market share from competitors like Texas Instruments across various sectors, including robotics, EVs, and AI chips [3] - The company's ASIC business is expected to benefit from ongoing AI capital expenditure, potentially outpacing competitors like NVIDIA in certain segments [2][4] Growth Potential - The Enterprise Data segment is anticipated to become a significant driver of revenue, potentially accounting for over half of MPWR's business in the coming years [2] - Current valuations are seen as overly penalized, with a strong short-term outlook driven by enterprise AI demand expected to lead to revenue beats in the next few quarters [3][4] Investment Case - MPWR presents a compelling investment opportunity with resilient long-term growth, structural market share gains, and increasing contributions from high-margin enterprise AI products [4] - The stock is considered underappreciated at current levels, with a potential upside of approximately 25% to a fair value estimate of $922 per share [4]