We recently published a list of the 15 Best Growth Stocks to Buy for the Next 3 Years. In this article, we are going to take a look at where Monolithic Power Systems Inc. (NASDAQ:MPWR) stands against other growth stocks to buy for the next 3 years.

On April 29, Dan Ives of Wedbush Securities joined ‘Power Lunch’ on CNBC to discuss his outlook for the tech sector and expressed that tariffs aren’t stopping the AI revolution. According to Ives, the critical question for the sector was whether spending, particularly CapEx, was being maintained. He expressed confidence that CapEx was holding up and predicted that the forthcoming results from big tech companies would serve more as a confidence booster for the market, rather than fueling the existing fears. As some investors are of the idea that concerns about a potential soft patch in the economy remain, there’s a preference for safer investments in insurance and other stable sectors, rather than big tech. However, Ives acknowledged that while uncertainty had been prevalent in recent weeks, his own survey work and field research indicate that AI-related spending stays strong. He noted that, while there were areas of the cloud sector where spending was accelerating, the overall uncertainty would likely result in broad guidance ranges from companies.

Michael Darda, the Managing Director, Chief Economist, and Macrostrategist at ROTH, also believes that AI would generate solid returns in the future. Ives agreed with Darda’s assessment and stated that enterprises were seeing similar advancements and could not afford to leave their AI projects behind without the risk of consequently falling behind. He also pointed out that for companies like those in the MAG7, the AI revolution is a central theme, which is why challenges brought forward by tariffs would not impact the AI revolution as much. Darda changed his outlook from bearish to bullish on tech and AI recently due to his personal experience with AI tools, which he felt had improved over the past year.

Dan Ives reiterated that, despite the uncertainty created by tariffs, the demand for software remained a safety blanket, and spending by hyperscale companies is expected to continue.

Our Methodology

We sifted through financial media reports to compile a list of the top growth stocks to buy for the next 3 years. We then selected 15 stocks with a 3-year revenue compound annual growth rate of over 20%. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024, which was sourced from Insider Monkey’s database.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

An engineer examining a DC to DC integrated circuit board, looking for any flaws.

Monolithic Power Systems Inc. (NASDAQ:MPWR)

3-Year Revenue CAGR: 22.26%

Number of Hedge Fund Holders: 51

Monolithic Power Systems Inc. (NASDAQ:MPWR) designs, develops, markets, and sells semiconductor-based power electronics solutions. It serves a range of markets, such as storage & computing, automotive, enterprise data, consumer, communications, and industrial markets.

In Q4 2024, the company’s automotive sector demonstrated solid growth due to the increasing adoption of Monolithic Power Systems Inc.’s (NASDAQ:MPWR) solutions in EVs, particularly in China, and the anticipated ramp-up of new designs. Notably, the company provides integrated 48-volt solutions. Looking ahead, growth in the automotive segment is expected to be further fueled by a European OEM’s ADAS (autonomous driving) solution in H2 2025

On March 24, Truist Securities reiterated a Buy rating on the stock with a $897 price target. The firm emphasized Monolithic’s position as a pioneer in the analog semiconductor field, particularly noting the company’s ongoing strength in product innovation. Truist also predicted that Monolithic could potentially hit about 20% in sales growth and low-20% EPS growth over a business cycle.

TimesSquare Capital Management U.S. Focus Growth Strategy stated the following regarding Monolithic Power Systems, Inc. (NASDAQ:MPWR) in its Q4 2024 investor letter:

“Monolithic Power Systems, Inc. (NASDAQ:MPWR) designs and develops integrated semiconductor solutions for power delivery architectures in computing, storage, automotive, industrial, communications, and consumer applications. Their stock came under pressure during the quarter due to a research report alleging technical issues with Monolithic’s products on Nvidia’s Blackwell AI platform and that it was in danger of completely losing that business. Our research indicated there is little merit to this claim and while Nvidia is going to multi-source, it is unlikely that Monolithic will be fully displaced. That gave us an opportunity to add this stock to the portfolio.”

Overall, MPWR ranks 11th on our list of the best growth stocks to buy for the next 3 years. While we acknowledge the growth potential of MPWR, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than MPWR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.