Monolithic Power Systems, Inc. MPWR is benefiting significantly from the rapid expansion of AI infrastructure spending, driven by strong demand for power management solutions used in AI servers, optical networking equipment and high-performance computing applications. In the first quarter of 2026, the company reported record revenues of $804.2 million, which increased 26.1% year over year and 7.1% sequentially, reflecting continued strength across its Enterprise Data and Communications businesses.
Enterprise Data revenues surged 97.7% year over year to $262.8 million, fueled by higher demand for AI and server-related power management solutions. Meanwhile, Communications revenues jumped 55.5% year over year and 33.1% sequentially, primarily driven by strong demand for optical modules and AI networking switches.
Its strength in AI infrastructure is supported by its robust capability in high-power-density solutions, monolithic integration and advanced module designs. MPS differentiates itself by offering single-piece silicon-based power solutions, unlike competitors that rely on multiple silicon components. This enables superior efficiency, compact designs and improved thermal performance, which are increasingly critical in next-generation AI servers and GPUs that are moving toward higher power requirements. Another major growth catalyst for MPS is the accelerating adoption of optical networking technologies in AI data centers. The company is benefiting from rising deployments of 800G optical modules and AI networking switches.
For the second quarter of 2026, MPS expects revenues between $890 million and $910 million. This reflects another quarter of strong sequential growth. Risks related to notebook demand weakness, tariffs and inflation remain concerns. However, the company’s strong execution, expanding AI exposure and strong focus on innovation are strengthening its position in the AI infrastructure market.
Other Tech Firms Benefiting From AI Infrastructure Expansion
Intel Corporation INTC is gaining solid traction in the AI infrastructure market. Super Micro Computer, a global leader in high-performance, energy-efficient IT solutions, has opted to deploy Intel’s Xeon 6 Processors in its 4-socket servers for large-scale database and enterprise applications. Intel has also revealed that several industry leaders across industries, including AT&T, Verizon, Samsung, and Ericsson, are leveraging Xeon 6 for network transformation and AI acceleration.
The growing proliferation of AI-based applications and generative AI tools across industries presents a solid growth opportunity for Celestica, Inc. CLS. AI investments are driving demand for Celestica’s enterprise-level data communications and information processing infrastructure products, such as routers, switches, data center interconnects, edge solutions, and servers and storage-related products. To further capitalize on this trend, Celestica is steadily expanding its offering through innovation and strategic collaboration.
MPWR’s Price Performance, Valuation & Estimates
Monolithic Power shares have soared 138% over the past year compared with the industry’s 111.1% growth.
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From a valuation standpoint, Monolithic Power trades at a forward price-to-sales ratio of 19.85, above the industry tally of 11.22.
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Earnings estimates for 2026 have increased 11.2% to $24.05 per share over the past 60 days, while the same for 2027 have risen 12.6% to $29.3.
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Monolithic Power currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).