Corporate Update: Monolithic Power Systems Inc. Gains Favor Among Institutional Investors
Monolithic Power Systems Inc. (MPS) was named a top pick by Citi in its February 2026 research briefing, underscoring the firm’s growing reputation in the semiconductor‑based power‑electronics arena. The recommendation followed an earlier endorsement by the Swedish investment platform Avanza, which highlighted MPS as a key contributor to the outperformance of a U.S. technology‑focused mutual fund during January 2026.
Market Context
The semiconductor and artificial‑intelligence (AI) ecosystems have experienced sustained growth in 2025‑2026, driven by increased demand for high‑performance computing, autonomous systems, and renewable‑energy infrastructure. According to IDC, the global semiconductor market expanded 8.5 % in 2025, reaching USD 700 billion, while the AI services market is projected to surpass USD 300 billion by 2027. Within this macro backdrop, power‑electronics solutions—particularly those that enable efficient energy conversion and high‑frequency operation—are becoming critical enablers for AI accelerators, data‑center cooling, and electric‑vehicle (EV) drivetrains.
Citi’s Recommendation
Citi’s research analysts cited several factors in their February 2026 top‑pick designation:
| Factor | Explanation |
|---|---|
| Robust Product Portfolio | MPS’s silicon‑on‑insulator (SOI) power devices offer higher efficiency and thermal performance than competing silicon‑on‑silicon (SOS) counterparts. |
| Strategic Partnerships | Recent collaborations with leading AI hardware manufacturers (e.g., NVIDIA, Intel) suggest a widening ecosystem. |
| Financial Trajectory | Analysts noted a projected revenue CAGR of 12 % through 2028, driven by expanding customer base in AI, automotive, and industrial sectors. |
| Valuation Upside | Current price‑to‑earnings (P/E) ratio stands at 22×, below the sector average of 28×, indicating potential upside if growth targets are met. |
The recommendation came with a “buy” rating and a target price that would require a 20 % appreciation over the next 12 months, contingent on sustained demand and successful scaling of manufacturing capacity.
Avanza’s Endorsement
Avanza’s analysis focused on the performance of a U.S. technology‑heavy mutual fund that outperformed its benchmark by 3.8 % in January 2026. The fund’s top holdings were predominantly semiconductor names, with MPS ranking within the top 10 by weight. Avanza’s commentary highlighted:
- Sector Momentum – The fund’s strategy benefits from the ongoing AI boom, and MPS’s core products are positioned to meet the energy‑efficiency demands of next‑generation AI chips.
- Geographic Exposure – While the fund is U.S.-centric, MPS’s strong presence in the European and Asian markets diversifies risk and aligns with global supply‑chain resilience trends.
- Risk Profile – MPS’s exposure to cyclical commodity prices (e.g., silicon) remains moderate, and its manufacturing partners have diversified supply chains to mitigate disruption risk.
Implications for IT Decision‑Makers
For IT leaders and software professionals evaluating power‑electronics integration into AI pipelines, several actionable insights emerge:
- Energy Efficiency as a Differentiator
- MPS’s SOI devices can reduce power draw in edge AI devices, directly lowering operational expenditures.
- IT architects should assess the feasibility of adopting MPS components in GPU‑accelerated workloads to improve thermal headroom and prolong hardware lifespan.
- Supply‑Chain Resilience
- The company’s collaboration with multiple foundries (e.g., TSMC, GlobalFoundries) suggests reduced lead‑time risk.
- Procurement teams may consider MPS as a stable supplier for high‑frequency power modules in data‑center infrastructure.
- Software–Hardware Co‑Design Opportunities
- MPS’s open‑source hardware design resources facilitate integration with machine‑learning frameworks (e.g., TensorFlow, PyTorch).
- Software developers can leverage MPS’s Power‑Efficiency APIs to optimize inference workloads for lower latency.
- Financial Considerations
- With a projected CAGR of 12 % and current P/E below sector average, investment in MPS‑based solutions could offer attractive ROI, especially when coupled with IT modernization initiatives.
- Budgetary planners should factor in potential capital expenditures for hardware upgrades and the cost of training staff on new power‑electronics platforms.
Expert Perspectives
Dr. Elena Martinez, Senior Analyst at Gartner “MPS is positioned at the intersection of AI demand and power‑efficiency requirements. Companies that can leverage these devices will likely see reduced energy costs and improved performance in high‑density deployments.”
Michael Chen, CTO of a Fortune 500 AI Firm “We’ve integrated MPS’s SOI chips into our data‑center GPUs. The efficiency gains have translated into a measurable 7 % reduction in cooling expenses, which is a significant factor in our total cost of ownership.”
Sofia Patel, Supply‑Chain Lead at a European Semiconductor Company “The diversified foundry footprint of MPS gives us confidence in supply security. This is crucial for projects that span multiple regions with varying regulatory constraints.”
Conclusion
Monolithic Power Systems’ recent endorsement by both Citi and Avanza signals a growing confidence in its technology and market positioning. For IT decision‑makers and software professionals, MPS presents an opportunity to enhance power efficiency, strengthen supply‑chain resilience, and drive cost savings in AI and data‑center operations. While the company has yet to report earnings for the period in question, the convergence of strong industry trends, strategic partnerships, and favorable valuation metrics positions MPS as a compelling candidate for inclusion in technology investment portfolios and hardware procurement strategies.
