• Shares of Monolithic Power Systems are down more than 30% since its last earnings report in late October.

• The company’s fourth-quarter forecasts and reports that its sales to Nvidia could decline sent the stock sharply lower in the final months of the year.

• Analysts have remained bullish, citing the expanding market for AI-related leads as a boost to revenue in the coming years.

After hitting all-time highs last year, shares of Monolithic Power Systems (MPWR) have fallen more than 30% since the semiconductor company’s last earnings report in late October, but analysts have remained bullish on the stock.

In a note earlier this week, analysts at Deutsche Bank added Monolithic’s stock to their “top picks” list and called its recent slide a “buying opportunity.” Analysts reiterated their “buy” rating and a $900 price target, citing likely revenue growth and improving margins over the next two years as positive catalysts.

The monolith beat earnings estimates in the third quarter, but the company’s forecast that revenue growth would be “roughly flat” in the fourth quarter rattled investors and its shares fell 17% in a day.

Shares he received another blow in November when a report suggested Nvidia (NVDA) was considering reducing the amount of components it buys from Monolithic for its Blackwell platform. Analysts had cited earlier in Blackwell as a positive catalyst for monolithic stock.

Analysts at Deutsche Bank wrote that even if Monolithic loses share among Nvidia suppliers, the company should “continue to deliver solid AI-related growth” as the potential customer market continues to expand – if

While the company’s valuation is “at the higher end of our comfort range,” analysts said it is justified due to Monolithic’s “consistent execution, above-industry growth , the diversity of growth engines and the potential for sustainable margin expansion”.

Ten of the 11 analysts tracked by Visible Alpha rate the hardware maker’s stock a “buy” along with a “hold” rating. The average price target of $822.91 is more than 30% above Friday’s closing price of $625.82, suggesting analysts think the stock will account for most of the ground it has lost since of its third quarter report.

Monolithic plans to release its fourth-quarter earnings report after the bell on Feb. 6.

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