This Nvidia Supplier’s Stock Is Down 30% in 3 Months—Here’s Why Deutsche Bank Says It’s Still a Buy | Global News Avenue

After reaching all-time highs last year, Monolithic Power Systems (MPWRShares have fallen more than 30% since the semiconductor company’s last earnings report in late October, but analysts remain bullish on the stock.

In a report earlier this week, Deutsche Bank analysts added Monolithic’s stock to their “top picks” list and called its recent slide a “buying opportunity.” Analysts reiterated their “buy” rating and $900 price target, citing likely revenue growth and margin improvement over the next two years as positive catalysts.

NVIDIA’s sales likely to fall on mild fourth-quarter forecast, sending stock price lower

Monolithic’s third-quarter profit exceeded expectations, but the company’s forecast that revenue growth in the fourth quarter will be “roughly flat” shocked investors, and its stock price plummeted 17% in one day.

shares hit again Last November, a report suggested that Nvidia (NVDA) is considering reducing the number of components it purchases from Monolithic for its Blackwell platform. Analysts have Blackwell cited previously Acting as a positive catalyst for Monolithic stock.

Expanding the artificial intelligence market, “diversity of growth drivers” helps overall development

Even if Monolithic loses vendor share to Nvidia, the company should “continue to deliver solid AI-related growth” as the market of potential customers continues to expand, Deutsche Bank analysts wrote.

While the company’s valuation is “at the high end of our comfort range,” analysts said it’s justified because of Monolithic’s “consistent execution, above-industry growth, diversity of growth drivers, and sustainable margins expansion potential”.

Ten of 11 analysts tracked by Visible Alpha rate the hardware maker’s stock a “buy,” with one rating it a “hold.” The average price target is $822.91, which is more than 30% higher than Friday’s closing price of $625.82, indicating that analysts believe the stock will make up most of the ground lost since the third-quarter report.

Monolithic is scheduled to release its fourth-quarter earnings report after the bell on February 6.