KeyBanc positive on Monolithic Power into earnings

KeyBanc maintained its Overweight rating on Monolithic Power Systems with a price target of $2,100, based on 54 times the firm’s 2027 earnings per share estimate of $38.53.

The firm expects the company to report stronger results and raised guidance, driven by continued strength in Enterprise Data as server CPU and AI demand remains strong and Vera Rubin begins its ramp.

KeyBanc noted that while HBM4 constraints are limiting the near-term Vera Rubin ramp, Monolithic Power remains the primary stage 2 Vcore supplier, with its prior Vcore issue resolved and neither ON Semiconductor nor Texas Instruments qualified at this point.

The firm said Nvidia is now expected to move to VPD on Rubin Ultra using a discrete architecture, which KeyBanc estimates will drive higher Monolithic Power content versus Rubin, providing another growth driver into 2027 and 2028.

KeyBanc also expects the company to benefit from a broader cyclical recovery, with power analog suppliers positioned to benefit from increasingly tight supply and leverage to raise pricing. Monolithic Power raised prices by 5% to 10% for PCs and 10% to 15% for servers in the third quarter of 2026.

For the third quarter of 2026, KeyBanc’s revenue and earnings per share estimates are $1.18 billion and $8.02, compared to consensus of $1.16 billion and $7.79. For the fourth quarter of 2026, the firm’s estimates are $1.24 billion and $8.48, compared to consensus of $1.22 billion and $8.21.

The stock currently trades at a forward price-to-earnings ratio of 32 times based on consensus, compared to a three-year median historical price-to-earnings ratio of 43 times.