Monolithic Power Systems experienced a 15% decline in its share price over the past month, amid multiple impactful events. The company's board approved amended bylaws granting more rights to stockholders, potentially influencing investor sentiment. This governance change coincided with turbulent market conditions, as the Nasdaq Composite fell into bear market territory, driven by escalating global trade tensions and steep tariffs announced by the Trump administration. The broader technology sector, including chip stocks, saw significant declines, which likely exacerbated Monolithic Power's downturn. This period of uncertainty has placed considerable pressure on Monolithic Power Systems's stock performance.

Every company has risks, and we've spotted 3 possible red flags for Monolithic Power Systems (of which 2 shouldn't be ignored!) you should know about.

AI is about to change healthcare. These 25 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early.

Over the past five years, Monolithic Power Systems has delivered total shareholder returns of 207.88%. This impressive performance underscores the company's strategic efforts to enhance shareholder value through key initiatives. A significant factor includes the focus on returning capital to shareholders, highlighted by a $500 million share repurchase program initiated in February 2025, coupled with consistent dividend increases, such as the recent hike to $1.56 per share in April 2025. These actions not only reflect a commitment to rewarding shareholders but also indicate a strong cash position.

The company's emphasis on product diversification and innovation has also played a vital role. In particular, the development of silicon carbide inverters for clean energy applications aims to secure new revenue streams and enhance margins. Moreover, the opening of a design center in Porto, Portugal in September 2023 exemplifies efforts to expand capabilities in power solutions across different sectors. Despite recent challenges, including a class action lawsuit and board changes, Monolithic Power has navigated its strategic path effectively.

Insights from our recent valuation report point to the potential undervaluation of Monolithic Power Systems shares in the market.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include NasdaqGS:MPWR.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com