Shares of power management chips maker Monolithic Power Systems (NASDAQ:MPWR) jumped 1.3% in the afternoon session after an analyst from Needham raised the company's stock price target by 25% to $1,025.

The analyst kept a 'Buy' rating on the shares. This decision came after recent meetings with Monolithic Power's chief executive officer and other top leaders where growth drivers were discussed. The firm cited stronger demand for the company's power-management products as a reason for the increased target. This positive view was supported by the semiconductor company's solid financial health, which included robust revenue growth over the previous twelve months and strong profitability.

After the initial pop the shares cooled down to $900, up 1.5% from previous close.

Is now the time to buy Monolithic Power Systems? Access our full analysis report here, it’s free.

Monolithic Power Systems’s shares are very volatile and have had 27 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 28 days ago when the stock dropped 2.3% on the news that the major indices continued to retreat (Nasdaq -1.5%, S&P 500 -1.2%) amid profit-taking and renewed concerns about tariffs. Investors reacted to a federal court ruling that most of President Trump's global tariffs were illegal, raising uncertainty over trade policy and the fiscal impact of potential refunds. Rising Treasury yields added to the pressure, with the 10-year climbing above 4.2% and the 30-year nearing 5%, intensifying worries about stretched equity valuations. September's historically weak track record for stocks further dampened sentiment, leaving traders cautious ahead of the jobs report later in the week and the Federal Reserve's upcoming rate decision.

Monolithic Power Systems is up 51.5% since the beginning of the year, and at $900 per share, it is trading close to its 52-week high of $943.21 from October 2024. Investors who bought $1,000 worth of Monolithic Power Systems’s shares 5 years ago would now be looking at an investment worth $3,219.

Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.