Monolithic Power Systems

MPWR

Market cap $66.5B

The S&P 500 information-technology sector's forward P/E ratio is at its lowest relative to five-year averages among all sectors in the index.

Semis rallied with the support of tailwinds, but they reversed course when the same tailwinds turned into headwinds in Q1 2026. Semis lost most of their gains as they headed into Q2 2026 and it could have been worse if not for the prospect of something that may not be attainable. Q2 2026 is likely to see increased volatility, unless a resolution is found to the Middle East and the uncertainty hanging over semis is lifted.

The quiet dividend-growth winner? Monolithic Power Systems (MPWR) is the “power cooler” behind the scenes. Its specialized chips regulate electricity flow which keeps AI processors running coolly and efficiently. At a 25% annual dividend growth rate, its payout literally doubles every three years.

Stock splits can create a windfall for investors whenever they're announced, and even just the prospect of one can lift prices.

Monolithic Power Systems' specialization in DC-DC power semiconductors, fabless model, and advanced process technologies drive superior growth and market share gains across diversified end markets. Despite a temporary setback in the Enterprise Data segment due to Nvidia order shifts, growth rebounded strongly, supported by new customer wins and robust AI/data center demand. Key risks include customer concentration and foundry dependence, but Monolithic Power Systems' technology leadership and expanding customer base underpin a strong multi-year growth outlook.

The AI infrastructure buildout isn't slowing down, and Wall Street knows it. Citi analysts went through the semiconductor landscape after the latest earnings cycle and came back with four names they think still have room to run.

Monolithic Power is above its 50-day moving average amid an intense sell-off in stocks.

The 4-Factor Dividend Growth Portfolio, a rules-based alternative to SCHD, targets high-quality, growth-oriented dividend stocks using four equally weighted metrics. Since inception, the strategy has delivered a 14.17% annualized return, maintaining a 2.12% annualized outperformance over SCHD despite recent SCHD momentum. The portfolio emphasizes strong free cash flow, robust dividend growth, high return on invested capital, and above-average yields, with low monthly turnover.

Most dividend investors gravitate toward the same familiar names: utilities, consumer staples, REITs.

As Wall Street's love affair with artificial intelligence heavyweights cools, some investors are pivoting to infrastructure companies they expect to benefit from AI capital spending, a shift that is spawning a slew of new products.