Monolithic Power Systems Inc

STMicroelectronics has raised its datacenter revenue ambition, now expecting to exceed $1 billion in 2026 and reach well above $2 billion in 2027, driven by strong demand for optical connectivity and power-management solutions in AI infrastructure. The company's Communication Equipment & Computer Peripherals revenues jumped 50% year over year and 13% sequentially in the second quarter, fueled by custom products and microcontrollers for optical connectivity, with traction across silicon photonics ICs, electronic ICs, and microcontrollers. ST is also expanding into the power stage of Cloud AI infrastructure, supplying microcontrollers and high-voltage power and analog products while building a pipeline for low-voltage power and analog solutions, and it secured multiple design wins spanning optical connectivity and silicon and silicon-carbide power solutions. The company expects 2026 net capital expenditures at the high end of its $2-$2.2 billion range, partly reflecting accelerated spending on cloud optical interconnect, and AI datacenter programs together with LEO satellite communication are expected to help push fourth-quarter revenues above $4 billion. STMicroelectronics faces strong competition from Broadcom in AI networking and optical connectivity and from Monolithic Power Systems in AI datacenter power infrastructure, while its stock has soared 115% year to date and trades at a forward 12-month price-to-earnings ratio of 25.04.

Semiconductor stocks including Lam Research, Monolithic Power Systems, Marvell Technology, Micron, and onsemi fell sharply amid a broad global sell-off driven by fears of increased Chinese competition and doubts about the sustainability of AI-related demand. Lam Research dropped 6.5%, Monolithic Power Systems fell 3.5%, Marvell Technology declined 7.4%, Micron lost 8.4%, and onsemi slid 5%. The declines were part of a wider rout that saw Amkor plunge nearly 24% after its third-quarter revenue guidance missed estimates, while Vishay Intertechnology, FormFactor, and Penguin Solutions fell roughly 9% to 11%. Investor anxiety was heightened by reports of China's progress in advanced chip manufacturing, including mass production of homegrown immersion deep ultraviolet lithography machines and the strong stock market debut of Chinese competitor ChangXin Memory Technologies, sparking fears of future memory chip oversupply and pricing pressure.

Shares of several US semiconductor companies declined after the US government announced new tariffs of 10% to 12.5% on 60 trading partners, including the European Union, Japan, South Korea, and Taiwan, over forced labor concerns. The tariffs, imposed under Section 301, are seen as legally durable and potentially permanent, raising fears of long-term margin compression for US chipmakers that rely on imported materials, equipment, and outsourced assembly and test services from these regions. Among the affected stocks, Lattice Semiconductor fell 4.5%, Allegro MicroSystems dropped 4.2%, Monolithic Power Systems declined 3%, Marvell Technology lost 5.3%, and MACOM decreased 4%. The sell-off added to a global rout that began overnight with Asian chip heavyweights Samsung and SK Hynix.

Monolithic Power Systems is trading at a forward P/E of about 54, well above Analog Devices at roughly 26 and Texas Instruments at around 38, as investors price in years of AI-driven power-management growth. First-quarter 2026 revenue rose 26.1% year over year to a record $804.2 million, with adjusted EPS up 26.2% to $5.10, while the Enterprise Data segment—its AI server business—surged 97.7% and now drives nearly 80% of total revenue growth. Management raised its manufacturing capacity target from 4 billion to 6 billion units, signaling confidence in sustained demand, and the recent dismissal of the Bel Power Solutions lawsuit removed a legal overhang. However, gross margin was flat sequentially at 55.5% and lower than a year ago, inventory rose to $619.2 million with days increasing to 157 from 146, and short interest stands at 6.07% of float, above Analog Devices at 2.76% and Texas Instruments at 2.07%, suggesting caution around the premium valuation. Hedge fund holdings edged down to 49 from 50, while Analog Devices saw a sharp increase to 109 from 86, indicating stronger institutional conviction shifting toward the lower-multiple peer.

Shares of Monolithic Power Systems, Power Integrations, and Amkor fell sharply after a report that South Korea's SK Hynix is slowing its high-bandwidth memory expansion rattled the AI-chip complex. Monolithic Power Systems dropped 8%, Power Integrations fell 8%, and Amkor declined 7.9% in the afternoon session. The underlying report indicated SK Hynix is deliberately slowing its HBM4 ramp to redirect capacity into conventional DRAM, where shortages have pushed operating margins more than 15 points above HBM's, rather than signaling cooling AI demand. The broader sell-off also reflected profit-taking after a parabolic run, with Micron down roughly 11% while Nvidia fell only about 3.6%, as traders priced in 50 basis points of Fed hikes by December under new Chair Kevin Warsh, making debt-funded AI capex harder to justify at record valuations.