TSP Weekly Tech Stock Update—Aug 3, 2024

This Week: Nasdaq in correction mode, Microsoft earnings review, BTIG likes DDOG, HLIT delivers strong results, CRWD remains under pressure, Goldman upgrades Atlassian, MPWR tops expectations & more.

Hello from Rob…

—Shares of Monolithic Power Systems (MPWR, $795.76) fell 3% this week even though the company reported Q2 results that beat expectations and offered upbeat guidance.

In Q2, total revenue rose 11% to $507.4 million, above the consensus of $490.6 million. EPS of $3.17 came in 10 cents above the consensus. The Enterprise Data segment drove the upside, with revenue jumping 290% to $187.2 million (37% of total revenue).

Monolithic attributed the solid Q2 performance to three factors: (1) increased demand for AI-powered solutions, (2) improving order trends in several of its end markets and (3) initial revenue ramps associated with design wins secured in past years.

For Q3, Monolithic sees total revenue of $590 million to $610 million, well above the consensus of $549.8 million.

It was a volatile week for Monolithic stock. After the Q2 results were released, the shares on Wednesday jumped 10% and reached a high of $863.42. During Friday’s tech sell-off, the stock traded as low as $769.72.

Following the Q2 numbers, KeyBanc raised its Monolithic price target to $1,075 from $975 based on strong AI server demand and the ramp of new design wins. Raymond James boosted its target to $925 from $770, saying the company maintains its leadership position in the fastest-growing applications for AI datacenter power, with incremental drivers coming from other end markets beginning to inflect higher.

*Inside This Issue: Twilio (TWLO) Position Exited, Locking in Long-Term Gain

—Paid subscribers will receive the August 2024 PDF of Tech-Stock Prospector (TSP #270) via email on Tuesday, August 13.

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