Monolithic Power Systems Stock: A Planned Plunge or Buying Opportunity?

Shares of Monolithic Power Systems experienced significant downward pressure during yesterday's trading session. The semiconductor manufacturer's stock closed at $1,001, marking a 2.69% decline. Throughout the day, the sell-off intensified, with losses reaching as much as 4.49% at their lowest point. Despite this substantial price movement, numerous market analysts continue to maintain positive ratings on the equity.

The recent price action hasn't deterred professional investors from establishing or expanding positions. According to a shareholder letter published on October 22, NZS Capital initiated a new position in Monolithic Power during the third quarter. Similarly, Parcion Private Wealth LLC entered the stock in the previous quarter, building a position valued at $3,696 million.

Market sentiment indicators reflect the current uncertainty. The Fear & Greed Index registers at 39 points, indicating "Fear" among market participants, while the stock has demonstrated volatility of 5.87% over the past 30 trading days.

Divergent Analyst Views Highlight Underlying Concerns

While the investment community remains generally positive on Monolithic Power Systems, examination reveals notable reservations. Eleven analysts tracked by Public Investing maintain "Buy" recommendations, though their average price target of $972.27 sits below the current trading level. MarketBeat expresses even greater caution with a "Moderate Buy" rating and a $945 price target.

Should investors sell immediately? Or is it worth buying Monolithic Power?

This tempered optimism stems from concrete financial projections. Analysts anticipate sequential revenue declines for both the third and fourth quarters of 2025, creating headwinds for the company's near-term performance.

Upcoming Financial Report Could Set Direction

All attention now turns to the company's impending earnings release. Monolithic Power Systems is scheduled to report third-quarter results after market close on October 30, with the subsequent conference call likely to establish the stock's trajectory for the coming weeks.

Despite the cautious near-term outlook, several major financial institutions maintain constructive views. Wells Fargo continues to rate the stock "Equal-Weight," while Stifel has reaffirmed its "Buy" recommendation. Their confidence appears rooted in the company's strong positioning within the analog semiconductor segment and anticipated market share gains in server CPU power solutions.