KeyBanc Raises MPWR Target on AI Platform Leadership, Margin Upside & Enterprise Durability

KeyBanc’s price‐target increase on Monolithic Power Systems—from $950 to $1,050 on September 30, 2025—reflects growing confidence in MPWR’s position in the AI chip power management market and a belief that enterprise revenue underperformance will be less severe than previously expected. [1][2] The firm cites that MPWR has secured approximately 50% share on Nvidia’s Blackwell Ultra (B300 HGX) platform, which—with supply constraints affecting competitors—has lifted expectations for MPWR’s 2025 performance. [1]

MPWR’s Q3 results confirm organic strength in several key areas. Overall revenue rose 18.9% YoY (10.9% sequentially) to $737.2 million. Growth was driven predominantly by Automotive (+36.1%) and Storage & Computing (+29.6%), which together accounted for ~46% of revenue. [3][4] The Enterprise Data segment, while still under pressure, posted 3.8% YoY growth and 33% sequentially, and now captures about a quarter of MPWR’s revenues. [4][5]

On the forward outlook, KeyBanc revised its enterprise segment forecast: instead of an approximate 10% decline in 2025, it now estimates only a ~4% drop. [1] This suggests a better ability to manage supply/demand imbalance, especially given MPWR’s newer design wins and ramping in both enterprise and AI applications. [4] Margins remain stable, with Q3 gross margins in the mid-55% range and guidance for Q4 margins remaining relatively steady. [4][5]

However, risks are nontrivial. Enterprise Data still lacks consistency and remains vulnerable to macro and customer demand shocks. Inventory days continue to be elevated (~139 days), and incremental working capital demands—especially in receivables—are heightening cash‐flow risk. [4] Valuation multiples already incorporate much of the upside, and any failure in AI volume ramps or additional margin erosion could lead to downside. Also, MPWR’s shift toward solutions (modules, system‐level) while positive strategically, may increase complexity and capex or product development costs. [3][4]

Strategically, MPWR appears well positioned: its strong presence in Nvidia’s platforms (both current—B300—and upcoming ones) offers tailwinds, especially as Edge AI, robotics, EVs, and ADAS demand grow. [1][4] Maintaining Overweight suggests KeyBanc believes that these secular trends plus market share gains more than offset short-term enterprise softness. Investors should ask: how sustainable are AI platform relationships? Can MPWR defend against competitive pressure and pricing erosion? What visibility does the company have into 2026’s enterprise data demand?