Rosenblatt’s Kevin Cassidy Upgraded Monolithic Power Systems (MPWR). Here’s the Quarter That Won Him Over Farooq Thu, November 12, 2026 at 6:12 PM EST 4 min read ^GSPC -0.35% MPWR -1.47% ^DJI -0.36% ^IXIC -0.39% Trade MPWR on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
We just published a list of the 10 Best Growth Stocks for the Next 5 Years and Monolithic Power Systems (NASDAQ:MPWR) ranked 8th on this list.
Technology stocks went from celebration to rout within two sessions this month. On Wednesday, November 4, equities rallied after Democrats swept Congress in the midterm elections. By Thursday, the S&P 500 had fallen 4.36% and the Dow had lost 3.44%, while the Nasdaq Composite closed 5.52% lower, its worst day since April 2025. The drop pushed the tech-heavy index into correction territory, at least 10% below its October 6 record close.
The selling did not stop there, and the S&P 500 went on to post its worst week since June. Truist chief markets strategist Keith Lerner called the action "something of a buyers' strike" in technology. Breadth was thin, with only about one in seven S&P 500 stocks rising on the day of the steepest decline.
The election result mattered for reasons that go beyond party control. eToro market analyst Jakub Rochlitz said rising electricity prices turned data-center construction into a political issue during the campaign. In his view, markets now assume that the artificial intelligence buildout will be slower and more expensive, which rewrites growth expectations for every company along the supply chain.
The damage was sharpest in semiconductors. The Philadelphia Semiconductor Index plunged 12% and the Nasdaq-100 fell 6.4%, the biggest one-day declines for both gauges since March 2020. Readers following the group can find more names in our list of the most promising technology stocks to buy right now.
Anxiety about AI spending had been building well before the vote. Bloomberg reported that interest rates were climbing, borrowing to fund the buildout was growing, and public backlash against data centers was spreading. Investors are now demanding higher yields from heavily indebted data-center builders, which raises the cost of every new project.
The numbers show how quickly sentiment turned. An October 30 sell-off erased more than $1 trillion of tech market value, and chipmakers surrendered more than $1.5 trillion on November 5 alone. Analyst-driven picks from the same corner of the market are collected in our list of the best aggressive growth stocks to buy according to Wall Street analysts.
Not everyone read the move as a break in the trend. Argent Capital Management portfolio manager Jed Ellerbroek told Reuters that the selling felt like capitulation among the beneficiaries of data-center spending, though the size of the move looked outsized to him. His comment shows that even investors who saw capitulation in data-center names questioned the scale of the decline.
Monolithic Power Systems made it to our list because it has a five-year EPS growth rate of 29.77% and an average upside potential of 22%.
Rosenblatt analyst Kevin Cassidy upgraded Monolithic Power Systems to Buy from Neutral on October 30 and raised his price target to $1,700 from $1,575, pointing to a third quarter that beat expectations and lifted guidance in enterprise data and communications. The quarter gave him plenty to work with. Revenue passed $1 billion for the first time, and enterprise data sales grew 164.6% as customers building AI servers bought more of the company's power chips.
Monolithic Power Systems designs the power chips that sit beside the processors in those servers. Management said capacity is expanding toward $8 billion of annual revenue by the second half of 2027, and a first large data converter design win is set to ramp that year. Consumer sales fell, a reminder that the growth is concentrated in data-center markets, and the company also bought back stock during the quarter.
Investors have started to ask how much of the profit jump reflects lasting pricing power. That margin question is the subject of our look at Monolithic Power's margin jump and why it matters for the next downturn.
While we acknowledge the risk and potential of MPWR as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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