Monolithic Power Systems Stock Fell 9% in a Single Day. Here’s Where the Stock Could Go in 2026

Key Stats for Monolithic Power Systems Stock

• Current Price: $1,498.77
• Target Price (Mid): ~$2,475
• Street Target: ~$1,800
• Potential Total Return: ~65%
• Annualized IRR: ~12% / year
• Earnings Reaction: -1.92% (April 30, 2026)

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What Happened?

The mood in chip stocks flipped from greed to fear in two weeks, and Monolithic Power Systems (MPWR) took the full hit. MPWR stock fell 9.29% on June 16, 2026, closing at $1,498.77 and erasing its recent AI-surge pop. Bulls call it sector noise, hitting a company whose AI server business is still compounding fast. Bears say a stock near 59x forward earnings was always going to fall hardest when sentiment turned. The question now is whether this is a discount worth buying or the first crack in a premium that ran too far.

What Caused the Drop

The decline had nothing to do with MPS itself. It was the tail of a sector-wide repricing that began when Broadcom reported on June 3: a revenue and earnings beat, but soft forward AI chip guidance and no raise to its full-year AI forecast. That sparked a sell-the-news reaction across the chip supply chain. On June 5, the Philadelphia Semiconductor Index fell about 10%, its steepest day since 2020. The selling carried into the following sessions, and a spike in Treasury yields after a strong May jobs report added macro pressure.

By June 16, MPWR was caught in the same downdraft, underperforming the broader chip group alongside Micron and Nvidia. Its high valuation meant it had little cushion to absorb the move.

The drop is sharp, but it sits inside a much larger run. The stock had climbed more than 135% off its 52-week low of $671.18 before this pullback. Even after the fall, the 22.45% max drawdown from November 18, 2025, remains the worst of the past year. That frames the move as a retracement within an uptrend, not a breakdown.

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Was the Reaction Rational?

The business itself did not weaken. MPS reported record Q1 2026 revenue of $804.19 million, up 26.1% year over year, beating the $782.12 million consensus. Adjusted EPS was $5.10 against $4.90 expected. Notably, the stock’s reaction on April 30 was just -1.92%, so the good news was largely priced in even before the rally that followed.

Growth came where investors want it. Enterprise Data, the segment covering AI server and data center power chips, led the quarter, and management raised its outlook for it to roughly 85% year-over-year growth on the Q1 call. CEO Michael Hsing tied the result to a broader shift: “Our results demonstrate the strength of our diversified model and our continued success in transforming from a chip-only, semiconductor supplier to a full-service, silicon-based solutions provider,” said Michael Hsing, CEO and founder of MPS. That shift matters because it supports more content per system and stickier design wins.

So the selloff was about sentiment and price, not earnings. But one overhang does make MPWR more fragile in a risk-off tape. On February 26, 2026, the company disclosed that its Audit Committee had determined that prior financial statements for fiscal 2024 and the 2025 interim periods should no longer be relied upon, citing an unintentional, non-cash accounting error with no misconduct. The restated figures were set for the 2025 Form 10-K. It does not change the demand story, but a high-multiple stock with an open accounting item tends to get sold first when sentiment turns.

Is MPWR Undervalued Today

That is where valuation does the work. The simplest way to see the risk: MPWR is the most expensive name in its peer group by a wide margin. Its NTM EV/EBITDA, or forward enterprise value to core earnings, is 49.13x. The peer median is 21.01x. Larger, equally AI-exposed names trade far lower, with Nvidia near 17x and Broadcom near 19x.

That premium is not unearned. MPS grows faster than most peers and owns a real edge in power density. But a multiple more than double the group median leaves no room for a stumble. When the whole sector derates, the priciest stock falls furthest, which is exactly what June 16 showed. The question for buyers is simple: you are paying up for growth that has to keep arriving on schedule.

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TIKR Advanced Model Analysis

This uses the TIKR mid-case scenario, realized 12/31/30, a balanced view that assumes steady growth without the most aggressive AI buildout.

• Current Price: $1,498.77
• Target Price (Mid): ~$2,475
• Potential Total Return: ~65%
• Annualized IRR: ~12% / year

See analysts’ growth forecasts and price targets for Monolithic Power Systems stock (It’s free!) >>>

Two revenue drivers underpin it: Enterprise Data, where AI-powered content rises with rack density, and Communications, where power for optical modules and switches is growing fast. The margin driver is net income margin expanding toward around 34% on higher-value module sales and better yields. The main risk is multiple compression: near 59x forward earnings, even strong execution can be undone if the valuation keeps derating.

Upside: AI demand sustains the mid-case revenue CAGR near 14%, and the premium holds, carrying the stock toward the target. Downside: a demand air-pocket forces a sharper re-rating, leaving the stock stuck well below it.

Conclusion

Watch the Q2 2026 report, guided to a revenue midpoint near $900 million. The metric that matters is Enterprise Data growth: hold near the raised 85% pace and the AI thesis stays intact, making the June drop look like a discount; slip, and the premium multiple becomes the story. In one line: MPWR is a real AI-power compounder whose biggest near-term risk is the price investors are paying, not the demand.

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Should You Invest in Monolithic Power Systems?

The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.

Pull up Monolithic Power Systems, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.

You can build a free watchlist to track Monolithic Power Systems alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.

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Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!