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If You Invested $1000 in Monolithic Power a Decade Ago, This is How Much It'd Be Worth Now

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How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.

Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.

What if you'd invested in Monolithic Power (MPWR - Free Report) ten years ago? It may not have been easy to hold on to MPWR for all that time, but if you did, how much would your investment be worth today?

Monolithic Power's Business In-Depth

With that in mind, let's take a look at Monolithic Power's main business drivers. Monolithic Power Systems, based in Kirkland, WA, designs, develops and markets high-performance power solutions. The company focuses on the market for high-performance analog and mixed-signal integrated circuits (ICs).

Monolithic’s products are widely utilized in industrial applications, telecommunication infrastructures, cloud computing, automotive and consumer applications.

Being a fabless company, Monolithic works with third-party contractors and chip assemblers for the manufacturing, assembling and testing of wafers and ICs. This approach permits the company to focus more on the designing and development of process technology at a lower-fixed cost.

Unlike other fabless semiconductor companies, Monolithic installs its own proprietary process technologies in third-party contractors’ equipment and facilities.

Monolithic reported total revenues of $507.4 million in the second quarter of 2024. The company’s key product families are direct current to direct current (DC to DC) products and Lighting Control products.

DC to DC ICs are used to convert and control voltages within a broad range of electronic systems, such as portable electronic devices, wireless LAN access points, computers and monitors, automobiles and medical equipment. The product line accounted for 98.8% of total revenues in the second quarter of 2024.
Lighting control ICs are used in backlighting and general illumination products. In the second quarter of 2024, the product line accounted for 1.2% of total revenues.

End-market-wise, 22.6% of total revenues came from Computing and Storage in the second quarter of 2024.

Precisely, Enterprise Data, Consumer, Industrial, Automotive and Communications end-markets contributed 36.9%, 8.3%, 6.4%, 17.2% and 8.6%, respectively, to the second quarter of 2024 revenues.

Monolithic’s primary competitors are Skyworks Solutions (SWKS), Microchip Technology (MCHP), Lattice Semiconductor (LSCC), IPG Photonics (IPGP), Power Integrations (POWI), Cree (CREE), Semtech (SMTC), Micron Technology (MU), Analog Devices (ADI), and GLOBALFOUNDRIES (GFS).

Bottom Line

While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Monolithic Power ten years ago, you're probably feeling pretty good about your investment today.

A $1000 investment made in October 2014 would be worth $23,801.68, or a gain of 2,280.17%, as of October 17, 2024, according to our calculations. This return excludes dividends but includes price appreciation.

Compare this to the S&P 500's rally of 213.65% and gold's return of 107.71% over the same time frame.

Going forward, analysts are expecting more upside for MPWR.

Monolithic has a strong growth opportunity due to its robust product portfolio that targets In-Car connectivity and infotainment, advanced driver assistance system. Being a fabless company, it works with third-party contractors and chip assemblers for the manufacturing, assembling and testing of wafers and ICs. The strategy permits it to focus more on the designing and development of process technology at a lower fixed cost. Investments in various markets, along with the development of the AI-driven e-commerce platform, support future expansion. Management expects cloud computing to be a notable growth driver. However, fierce competition in the analog market strains margin. Customer concentration lowers the company’s ability to hike prices, which is a major concern. Lower sales of products for storage solutions are a headwind.

Over the past four weeks, shares have rallied 5.14%, and there have been 1 higher earnings estimate revisions in the past two months for fiscal 2024 compared to none lower. The consensus estimate has moved up as well.

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