What Happened?
Shares of power management chips maker Monolithic Power Systems (NASDAQ:MPWR) jumped 5% in the afternoon session after Wells Fargo upgraded the stock's rating from "Equal-Weight" to "Overweight" and raised its price target. The bank's analyst, Joe Quatrochi, increased the target price on the shares from $1100 to $1125. The upgrade was based on improving sentiment in the chip sector, which was driven by the potential for inventory replenishment by customers. Wells Fargo also noted that the company faced easier year-over-year comparisons. This means its upcoming results would be measured against a relatively weaker period from the year before, which could make its growth look more impressive.
After the initial pop the shares cooled down to $1,025, up 4.2% from previous close.
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What Is The Market Telling Us
Monolithic Power Systems’s shares are very volatile and have had 29 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 9 days ago when the stock gained 4.4% on the news that a broader market rally drove investor optimism in artificial intelligence and big tech stocks.
The S&P 500, Dow Jones, and Nasdaq all pushed higher, approaching record levels set late last year. Much of the positive momentum was linked to the technology sector, with a particular focus on companies advancing artificial intelligence, a key theme at the annual CES trade show in Las Vegas. This continued a powerful trend from 2025, when AI-related developments were a primary catalyst for the market's bull run. The upbeat sentiment was further supported by hopes for easier monetary policy from the Federal Reserve following a weaker-than-expected US Services PMI reading.
Monolithic Power Systems is up 9.5% since the beginning of the year, and at $1,025 per share, it is trading close to its 52-week high of $1,105 from October 2025. Investors who bought $1,000 worth of Monolithic Power Systems’s shares 5 years ago would now be looking at an investment worth $2,702.
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