Key Points
Monolithic Power Systems reported better-than-expected Q3 sales and earnings.
The company's gross margin saw a modest decline last quarter.
Monolithic issued strong guidance, but some investors were hoping for more.
Monolithic Power Systems (NASDAQ: MPWR) stock is suffering big sell-offs in Friday's trading. The company's share price was down 11.3% as of 3 p.m. ET and had been down as much as 13.9% earlier in trading.
Monolithic reported its third-quarter results after yesterday's market close and delivered numbers that beat Wall Street's expectations. While the Q3 results beat the market's targets, the company's forward guidance fell short of what some investors were looking for.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
Monolithic stock is sinking despite strong Q3 performance
In Q3, Monolithic generated non-GAAP (adjusted) earnings per share of $4.73 -- beating the average analyst estimate of per-share earnings of $0.10. Revenue for the period came in at $737.18 million and beat the average analyst estimate by roughly $18.9 million. Sales were up roughly 11% year over year in the quarter, and adjusted earnings rose approximately 16.5%. On the other hand, the company's adjusted gross margin declined from 55.8% in last year's quarter to 55.5% in this year's period
What's next for Monolithic Power Systems?
Monolithic is guiding for sales to be between $730 million and $750 million in the current quarter. Meanwhile, the business's adjusted gross margin is projected to be between 55.2% and 55.8%. The company's guidance for Q4 actually looks pretty strong, but some investors seem to have been expecting an even better forecast.
Monolithic's management also indicated that sales connected to enterprise data center customers could increase between 30% and 40% in 2026. With the company posting strong Q3 results and solid guidance, and showing momentum in artificial intelligence (AI), today's sell-off could be a buying opportunity for risk-tolerant investors.
Should you invest $1,000 in Monolithic Power Systems right now?
Before you buy stock in Monolithic Power Systems, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Monolithic Power Systems wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $587,288!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,243,688!*
Now, it’s worth noting Stock Advisor’s total average return is 1,055% — a market-crushing outperformance compared to 194% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of October 27, 2025
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool recommends Monolithic Power Systems. The Motley Fool has a disclosure policy.
