MPWR, Fortinet Sweep Expectations, Surging on Thursday

Monolithic Power Systems (MPWR) and Fortinet, two emerging competitors in the technology industry, both surged in after-hours Thursday following exceptional earnings reports.

MPWR has garnered a great deal of attention in recent months for being a potential dominant supplier of electric hardware within the technology market. It is a semiconductor companies that specialized in DC-DC converters, power modules, and other forms of power management ICs. It is located in Kirkland, Washington, and was founded in 1997, making it an infant company compared to other chipmakers in the industry.

Most importantly, Monolithic has become involved in a very deep and interconnected relationship with the chipmaking giant Nvidia. MPWR is a key supplier of power management systems which Nvidia utilizes in its chips, especially the Blackwell lineup (e.g. GeForce RTX 4070s), which require a great amount of energy to fuel its artificial intelligence capabilities.

According to speculation, Monolithic is expected to develop up to an 80% market share in the Blackwell GPU line, with Yahoo Finance, KeyBanc, and other financial analysts rating it a strong buy. These said analysts have increased their price targets for the stock in recent months, and emphasized the stock as "undervalued," meaning that the share price may be traded lower than the tangible value of the company

On Thursday afternoon, the stock surged almost 16% following a very positive earnings report, reflecting its growing dominance in the electric semiconductors industry and as one of Nvidia's greatest partners.

Fortinet, another emerging company, has also garnered much attention recently. Primarily a software protection company, it specializes in network security solutions like firewalls and secure networking. Headquartered in Sunnyvale, California, it was founded in 2000 by Ken Xie, which makes it no less as young as Monolithic.

Unlike MPWR, it does have significant competition in its respective market. It primarily competes with Cisco, Check Point Software, Palo Alto Networks, and CrowdStrike, to name a few.

Yet, the Californian cybersecurity company made it clear that they are a formidable threat in its industry. The stock surged 7% following exceptional earnings, especially in Q4 2024.