Monolithic Power Systems Surges on Strong Q1 Forecast Driven by AI Demand
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Monolithic Power Forecasts Q1 Revenue Above Estimates on AI Demand, Shares Surge
(Reuters) - Monolithic Power Systems forecast first-quarter revenue above estimates on Thursday, betting on strong demand for its power control products as generative AI drives data center expansion, sending its shares up more than 14% after the bell. Growing adoption of the generative artificial intelligence technology has helped drive demand for the hardware required to help run advanced data centers, helping providers such as Monolithic. The Kirkland, Washington-based company, which counts AI chip heavyweight Nvidia among its customers, forecast its first-quarter revenue to be between $610 million and $630 million. Analysts' on average estimate $578.1 million, according to data compiled by LSEG. Its fourth-quarter revenue stood at $621.7 million, compared with estimates of $608.1 million. Adjusted profit was $4.09 per share, beating estimates of $3.98 per share. The company had said in November it remains a supplier for Nvidia's next-generation products, brushing off analyst concerns and media reports about it losing its share of power management systems to be used alongside Nvidia's latest Blackwell chips. (Reporting by Arsheeya Bajwa in Bengaluru; Editing by Shilpi Majumdar)
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Monolithic Power forecasts Q1 revenue above estimates on AI demand, shares surge
Feb 6 (Reuters) - Monolithic Power Systems (MPWR.O), opens new tab forecast first-quarter revenue above estimates on Thursday, betting on strong demand for its power control products as generative AI drives data center expansion, sending its shares up more than 14% after the bell. Growing adoption of the generative artificial intelligence technology has helped drive demand for the hardware required to help run advanced data centers, helping providers such as Monolithic. The Kirkland, Washington-based company, which counts AI chip heavyweight Nvidia (NVDA.O), opens new tab among its customers, forecast its first-quarter revenue to be between $610 million and $630 million. Analysts' on average estimate $578.1 million, according to data compiled by LSEG. Its fourth-quarter revenue stood at $621.7 million, compared with estimates of $608.1 million. Adjusted profit was $4.09 per share, beating estimates of $3.98 per share. The company had said in November it remains a supplier for Nvidia's next-generation products, brushing off analyst concerns and media reports about it losing its share of power management systems to be used alongside Nvidia's latest Blackwell chips. Reporting by Arsheeya Bajwa in Bengaluru; Editing by Shilpi Majumdar Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Technology
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Monolithic Power Systems' Q1 revenue forecast exceeds expectations, propelled by increasing demand for AI-related hardware. The company's shares jumped over 14% after-hours as it continues to benefit from the expanding AI market.
Monolithic Power Systems Exceeds Expectations with Strong Q1 Forecast
Monolithic Power Systems, a key player in the power control products industry, has announced a robust first-quarter revenue forecast that surpasses market expectations. The company's optimistic outlook is primarily driven by the surging demand for hardware essential to support the expansion of data centers, particularly in response to the growing adoption of generative artificial intelligence (AI) technology 12.
Financial Performance and Market Response
The Kirkland, Washington-based company projected its first-quarter revenue to fall between $610 million and $630 million, significantly outpacing analysts' average estimate of $578.1 million 1. This positive forecast triggered an immediate market reaction, with Monolithic Power Systems' shares surging by more than 14% in after-hours trading 2.
The company's strong performance was not limited to future projections. Monolithic Power Systems reported impressive fourth-quarter results, with revenue reaching $621.7 million, exceeding the estimated $608.1 million 1. Additionally, the adjusted profit per share stood at $4.09, surpassing the anticipated $3.98 per share 2.
AI-Driven Growth and Strategic Partnerships
Monolithic Power Systems' success can be attributed to its strategic position in the AI hardware supply chain. The company counts Nvidia, a heavyweight in the AI chip industry, among its key customers 1. This relationship has proven crucial as the demand for AI-related hardware continues to soar.
In November, Monolithic Power Systems reaffirmed its role as a supplier for Nvidia's next-generation products, effectively dispelling concerns raised by analysts and media reports about potentially losing market share in power management systems for Nvidia's latest Blackwell chips 2.
Implications for the AI Industry
The strong performance and optimistic outlook of Monolithic Power Systems serve as indicators of the broader trends in the AI industry. As companies increasingly adopt generative AI technologies, the demand for advanced data center infrastructure continues to grow 1. This trend is likely to benefit not only Monolithic Power Systems but also other providers of essential hardware and components for AI-driven technologies.
The company's success underscores the ripple effect of AI advancements on various sectors of the technology industry, from chip manufacturers to power management system providers. As AI continues to evolve and find new applications, companies positioned to support this growth are likely to see continued demand for their products and services.
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