Monolithic Power MPWR shares soared 8% in the last trading session to close at $1. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 6.8% loss over the past four weeks.
The optimism surrounding the stock can be attributed to strong AI-driven enterprise data demand, accelerating communications sales and expanding automotive pipeline.
This chipmaker is expected to post quarterly earnings of $5.85 per share in its upcoming report, which represents a year-over-year change of +39%. Revenues are expected to be $901.05 million, up 35.6% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Monolithic, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on MPWR going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Monolithic is a member of the Zacks Semiconductor - Analog and Mixed industry. One other stock in the same industry, Silicon Laboratories SLAB, finished the last trading session 0.5% higher at $219.75. SLAB has returned 0.8% over the past month.
For Silicon Labs, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.67. This represents a change of +509.1% from what the company reported a year ago. Silicon Labs currently has a Zacks Rank of #3 (Hold).
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
