What Happened?

Shares of power management chips maker Monolithic Power Systems (NASDAQ: MPWR) jumped 6.8% in the afternoon session after KeyBanc raised its price target on the stock, citing expectations the company would regain significant market share with NVIDIA's next-generation GPU platform. The investment firm increased its target to $1,250 from $1,050 while keeping an 'Overweight' rating. This decision was based on supply chain research suggesting Monolithic Power was positioned to capture about 70% of the market for components on NVIDIA's new Vera Rubin platform. The positive outlook from the analyst reflected strong confidence in the semiconductor company's future performance.

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What Is The Market Telling Us

Monolithic Power Systems’s shares are very volatile and have had 29 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 6 days ago when the stock dropped 2.9% on the news that a top executive, Saria Tseng, sold more than $17 million worth of company shares. According to regulatory filings, Saria Tseng, the company's EVP & General Counsel, sold 16,840 shares across transactions on October 15 and 16. The total value of the shares sold was approximately $17.1 million. Such a large sale by a high-ranking insider can sometimes cause concern among investors about a stock's valuation, even though the transactions were conducted under a pre-arranged trading plan. Following the sale, Tseng still directly owned 127,654 shares of the company.

Monolithic Power Systems is up 79.1% since the beginning of the year, and at $1,066 per share, has set a new 52-week high. Investors who bought $1,000 worth of Monolithic Power Systems’s shares 5 years ago would now be looking at an investment worth $3,311.

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