TD Cowen has raised its one-year price target on Monolithic Power Systems (NASDAQ:MPWR) to $1,350.00 from $1,250.00, while leaving its rating on the semiconductor company unchanged. The new target sits slightly below the Street high of $1,400. MPWR shares have risen 76.36% over the past year and are trading near the 52-week high of $1,226.30.
The price-target increase follows what TD Cowen characterized as "a solid beat and raise" by Monolithic Power Systems. The company also lifted its outlook for the Enterprise Data segment, which it expects to grow by more than 50% for fiscal 2026.
TD Cowen said visibility into AI infrastructure demand appears to be improving. The firm identified growth in accelerator unit shipments and greater adoption of module and vertical power solutions as drivers that are helping Monolithic capitalize on that demand. On the back of these developments, TD Cowen moved its top-line forecasts higher. The firm made a smaller upward revision to its earnings per share estimates and continued to rate the stock Buy.
In defending the new price target, TD Cowen noted that the $1,350 figure implies a premium valuation - roughly 53 times its 2027 EPS estimate. The bank described Monolithic Power Systems as "perhaps the best pureplay on AI power semis" with "a long track record of material outperformance versus peers." The stock's current EV/EBITDA multiple stands at 71.67, reflecting a notable premium within the semiconductor group.
Third-party data referenced by analysts indicates potential valuation pressure. According to InvestingPro, MPWR looks overvalued relative to its Fair Value estimate. At the same time, the company presents strong liquidity and shareholder-friendly capital allocation metrics: a reported current ratio of 5.91 and a streak of raising its dividend for eight consecutive years.
Monolithic Power Systems' most recent quarterly results contributed to analyst optimism. For Q4 2025 the company reported earnings per share of $4.79, ahead of the consensus forecast of $4.73. Revenue reached a record $751.2 million for the quarter, above the expected $740.23 million.
Other sell-side activity mirrored TD Cowen's recalibration. Needham elevated its price target on Monolithic Power Systems to $1,300 from $1,250 and kept a Buy rating in place. Needham specifically pointed to a more than 50% expected growth rate for the Enterprise Data segment in fiscal year 2026 as a principal reason for the increase.
Together, the analyst actions and the company’s quarterly results underscore bullish sentiment among some analysts toward Monolithic Power Systems, driven chiefly by an improved outlook in Enterprise Data and what market participants view as strengthening AI infrastructure demand. At the same time, valuation metrics cited by analysts and InvestingPro suggest that the stock carries a premium that investors will need to weigh alongside revenue and earnings momentum.
Key points
- TD Cowen raised its price target to $1,350 from $1,250 and maintained a Buy rating, citing improved visibility in AI infrastructure and stronger Enterprise Data growth expectations.
- Monolithic Power Systems reported Q4 2025 EPS of $4.79 versus $4.73 expected, and record quarterly revenue of $751.2 million compared with $740.23 million forecasted.
- Valuation is elevated - the stock trades at an EV/EBITDA multiple of 71.67 and TD Cowen’s target represents roughly 53 times its 2027 EPS estimate; InvestingPro flags the stock as overvalued versus Fair Value.
Risks and uncertainties
- Premium valuation metrics expose investors to downside if revenue or earnings momentum falters; this impacts equity investors in the semiconductor sector.
- Improving visibility in AI infrastructure is cited as a driver, but if accelerator unit growth or adoption of modules and vertical power solutions slows, top-line and margin assumptions could be at risk; this affects firms exposed to AI hardware demand.
- Analyst expectations vary - while TD Cowen and Needham raised targets, third-party fair-value analysis indicates potential overvaluation, creating uncertainty in market consensus and investor positioning in technology and semiconductors.
Tags: Semiconductors, AI, Investing