Monolithic Power surges on earnings beat, 28% dividend hike
AI server demand powers Q4 revenue growth as company raises quarterly dividend to $2.00
Monolithic Power Systems shares extended gains in Thursday trading after the chipmaker reported stronger-than-expected fourth-quarter results and announced a significant dividend increase, underscoring growing demand from artificial intelligence infrastructure.
The Kirkland, Washington-based company reported revenue of $751.2 million for the quarter ended December 31, 2025, surpassing analyst estimates of $720.9 million. The figure represents a 20.8% increase from the same period a year earlier. Non-GAAP earnings per share reached $4.79, topping the $4.63 consensus estimate.
Full-year revenue climbed 26.4% to $2.79 billion, reflecting robust demand across the company's diverse portfolio of power management solutions. GAAP gross margin for the quarter stood at 55.2%, demonstrating the company's pricing power despite competitive pressure in the semiconductor space.
In a move to enhance shareholder returns, the board of directors approved a 28% increase in the quarterly cash dividend, raising it from $1.56 to $2.00 per share. The increased dividend is payable on April 15, 2026.
Management's outlook for the first quarter of 2026 signals continued momentum, with revenue guidance of $770 million to $790 million, implying sequential growth from the fourth quarter. The company highlighted accelerating demand from AI servers and data center infrastructure as a key growth driver.
Monolithic Power's Enterprise Data segment, which includes AI server applications, demonstrated particular strength during the period. While full-year segment revenue of $701.8 million showed a modest 2% year-over-year decline, the company indicated strong sequential growth in the fourth quarter driven by AI-related design wins and data center expansion.
"Our diversified market strategy and focus on high-performance power solutions positioned us well to capitalize on the continued expansion of cloud computing and AI infrastructure," the company said in its earnings commentary.
The stock initially traded lower following the announcement, declining 2.4% in after-hours trading—a reaction described as being on the weaker end of the company's historical post-earnings performance. However, shares have since recovered, with the stock up 1.7% to $1,156 on Thursday afternoon, bringing its market capitalization to approximately $55.8 billion.
Analyst sentiment remains broadly positive heading into the earnings release, with a consensus "Strong Buy" rating and an average price target of $1,217.50, according to market data. The stock has rallied significantly over the past year, trading well above its 52-week low of $436.42 and approaching its recent high of $1,199.76.
The semiconductor sector has faced pressure from broader market concerns over inventory levels and slowing demand in certain end markets. However, companies with exposure to AI and data center infrastructure have outperformed, as hyperscale cloud providers continue to invest in computing capacity to support generative AI applications.
Monolithic Power specializes in high-performance power conversion and management solutions that improve energy efficiency in electronic systems. Its products are used in a wide range of applications, including cloud computing, telecommunications, automotive, industrial, and consumer electronics.
In a separate announcement on the same day, the company disclosed a transition in its chief financial officer position, adding an element of executive leadership change that investors will be monitoring closely.
The company's valuation, with a price-to-earnings ratio of 29.85, reflects expectations for continued growth in AI-related markets. However, investors will be watching for signs that demand momentum can be sustained beyond the current infrastructure investment cycle and how the company navigates potential macroeconomic headwinds affecting broader semiconductor spending.