We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Monolithic vs. Qualcomm: Which Semiconductor Stock Has More Upside?
Read MoreHide Full Article
Key Takeaways
Qualcomm is broadening beyond smartphones with AI processors, data center chips and new long-term targets.
MPWR is expanding AI server, power management and robotics offerings while investing in new products.
QCOM and Monolithic differ in growth outlook, valuation and competitive positioning across AI markets.
Qualcomm Incorporated (QCOM - Free Report) and Monolithic Power Systems (MPWR - Free Report) are prominent players in the semiconductor space. While Monolithic focuses on power management solutions that improve efficiency in AI servers and data center infrastructure, Qualcomm develops AI-capable processors powering smartphones, connected vehicles and edge devices.
The semiconductor industry is witnessing robust growth, fueled by the rapid adoption of AI, cloud computing and high-performance computing. Rising investments in AI data centers, enterprise servers and advanced computing infrastructure are driving demand for both compute and power management technologies. Let us analyze in depth the competitive strengths and weaknesses of the companies to understand who is in a better position to maximize gains from the emerging market trends.
The Case for Qualcomm
Growing AI proliferation is reshaping the semiconductor industry and Qualcomm is positioning itself to capture the emerging opportunities. For a long time, Qualcomm generated most of its revenues from smartphones. However, that market has become mature. The company is also facing competition from several other players in the industry, such as MediaTek and Samsung Exynos. Amid this backdrop, QCOM has undertaken a prudent approach to diversify its revenue stream.
AI adoption is set to create opportunities across a broad spectrum beyond smartphones, that includes PCs, cars, robotics, industrial equipment, networking gear and data centers. Legacy data centers primarily handled applications such as databases, websites and enterprise software. Rising usage of generative AI and AI agents has significantly increased demand for computing power. AI data centers must support large language model inference, multimodal AI, reasoning and memory-intensive workloads. Qualcomm is aiming to capitalize on this domain.
The company boasts decades of expertise in designing high-performance, low-power processors. This might give the company a competitive edge. Qualcomm recently launched a comprehensive data center portfolio that includes the Dragonfly C1000 CPU, designed for AI orchestration, agentic workloads and general-purpose computing; the Dragonfly AI300 inference accelerator for AI inference applications. It has also introduced a new memory architecture, Qualcomm High Bandwidth Compute, engineered to address the issues related to memory bandwidth bottlenecks while improving energy efficiency.
Backed by solid momentum, Qualcomm significantly raised its long-term financial targets. The company increased the fiscal 2029 non-handset revenue target to $40 billion, nearly double its previous target of $22 billion. The revised outlook includes more than $15 billion in data center revenues, $10 billion in automotive revenues and more than $14 billion in IoT revenues by fiscal 2029. The company projects non-GAAP earnings per share to exceed $18 by fiscal 2029.
The case for Monolithic
Monolithic is steadily increasing its investment in Enterprise Data, communications and server portfolio, which continue to benefit from growing spending in AI infrastructure by businesses. Strong demand for AI accelerators, CPUs and server power management solutions is driving demand in the Enterprise Data segment.
Its strong focus on innovation is a positive factor. MPWR is actively testing its first high-speed DDR5 interface products with major customers. This could create more growth opportunities in storage and computing markets over time. Robotics and physical AI are an emerging long-term growth driver. AI adoption in robotics has already started to create commercial opportunities. Recognizing this trend, Monolithic is broadening its exposure to robotics, building automation and portable AI devices.
However, Monolithic operates in a highly competitive analog semiconductor market populated by larger companies such as Analog Devices, Inc. (ADI) and Texas Instruments. These companies have broader product portfolios and deeper financial resources. Analog Devices boasts a strong presence in Industrial, Automotive and Communications markets. The company is set to acquire Empower Semiconductor for $1.5 billion in cash. Analog Devices is aiming to expand its AI-focused high-density power management solutions for hyperscalers and data centers. Such initiatives may impact Monolithic’s initiatives in the power management space.
Semiconductor manufacturing also requires substantial capital investments to drive innovation and maintain a competitive edge in the long term. This pressure on profitability is particularly high during periods of industry downturns.
Monolithic derives a substantial portion of revenues from Asia, making results sensitive to foreign exchange movements, tariffs and changing trade policies. Management continues to highlight geopolitical and macroeconomic uncertainty, particularly surrounding export controls and evolving global tariff policies.
How Do the Estimates Compare for QCOM & MPWR?
The Zacks Consensus Estimate for Monolithic’s 2026 sales and EPS indicates year-over-year growth of 32.78% and 35.3%, respectively. The EPS estimates for 2026 have remained unchanged over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Qualcomm’s 2026 sales and EPS implies a year-over-year decline of 3.44% and 10.47%, respectively. The EPS estimates for 2026 have remain unchanged over the past 60 days.
Image Source: Zacks Investment Research
Price Performance & Valuation of QCOM & MPWR
Over the past year, Monolithic has increased 85.6%, while Qualcomm has increased 20.1%.
Image Source: Zacks Investment Research
Qualcomm looks more attractive than Monolithic from a valuation standpoint. Going by the price/earnings ratio, QCOM’s shares currently trade at 17.51 forward earnings, significantly lower than 51.28 for Monolithic.
Qualcomm and Monolithic are taking several steps to strengthen their portfolio and gain from expanding their AI data center portfolio. Monolithic is venturing into high-growth markets such as robotics and physical AI. However, competition remains intense across power management, AI infrastructure and communications applications, where customers often require aggressive pricing and rapid innovation cycles. Qualcomm’s aggressive approach to diversify its revenue base, a comprehensive AI infrastructure roadmap spanning CPUs, inference accelerators and networking bodes well for long-term growth. Owing to these factors, a diverse portfolio and better valuation, Qualcomm is a better investment option at present.
View the Zacks #1 Rank List
Image: Bigstock
Monolithic vs. Qualcomm: Which Semiconductor Stock Has More Upside?
Key Takeaways
Qualcomm Incorporated (QCOM - Free Report) and Monolithic Power Systems (MPWR - Free Report) are prominent players in the semiconductor space. While Monolithic focuses on power management solutions that improve efficiency in AI servers and data center infrastructure, Qualcomm develops AI-capable processors powering smartphones, connected vehicles and edge devices.
The semiconductor industry is witnessing robust growth, fueled by the rapid adoption of AI, cloud computing and high-performance computing. Rising investments in AI data centers, enterprise servers and advanced computing infrastructure are driving demand for both compute and power management technologies. Let us analyze in depth the competitive strengths and weaknesses of the companies to understand who is in a better position to maximize gains from the emerging market trends.
The Case for Qualcomm
Growing AI proliferation is reshaping the semiconductor industry and Qualcomm is positioning itself to capture the emerging opportunities. For a long time, Qualcomm generated most of its revenues from smartphones. However, that market has become mature. The company is also facing competition from several other players in the industry, such as MediaTek and Samsung Exynos. Amid this backdrop, QCOM has undertaken a prudent approach to diversify its revenue stream.
AI adoption is set to create opportunities across a broad spectrum beyond smartphones, that includes PCs, cars, robotics, industrial equipment, networking gear and data centers. Legacy data centers primarily handled applications such as databases, websites and enterprise software. Rising usage of generative AI and AI agents has significantly increased demand for computing power. AI data centers must support large language model inference, multimodal AI, reasoning and memory-intensive workloads. Qualcomm is aiming to capitalize on this domain.
The company boasts decades of expertise in designing high-performance, low-power processors. This might give the company a competitive edge. Qualcomm recently launched a comprehensive data center portfolio that includes the Dragonfly C1000 CPU, designed for AI orchestration, agentic workloads and general-purpose computing; the Dragonfly AI300 inference accelerator for AI inference applications. It has also introduced a new memory architecture, Qualcomm High Bandwidth Compute, engineered to address the issues related to memory bandwidth bottlenecks while improving energy efficiency.
Backed by solid momentum, Qualcomm significantly raised its long-term financial targets. The company increased the fiscal 2029 non-handset revenue target to $40 billion, nearly double its previous target of $22 billion. The revised outlook includes more than $15 billion in data center revenues, $10 billion in automotive revenues and more than $14 billion in IoT revenues by fiscal 2029. The company projects non-GAAP earnings per share to exceed $18 by fiscal 2029.
The case for Monolithic
Monolithic is steadily increasing its investment in Enterprise Data, communications and server portfolio, which continue to benefit from growing spending in AI infrastructure by businesses. Strong demand for AI accelerators, CPUs and server power management solutions is driving demand in the Enterprise Data segment.
Its strong focus on innovation is a positive factor. MPWR is actively testing its first high-speed DDR5 interface products with major customers. This could create more growth opportunities in storage and computing markets over time. Robotics and physical AI are an emerging long-term growth driver. AI adoption in robotics has already started to create commercial opportunities. Recognizing this trend, Monolithic is broadening its exposure to robotics, building automation and portable AI devices.
However, Monolithic operates in a highly competitive analog semiconductor market populated by larger companies such as Analog Devices, Inc. (ADI) and Texas Instruments. These companies have broader product portfolios and deeper financial resources. Analog Devices boasts a strong presence in Industrial, Automotive and Communications markets. The company is set to acquire Empower Semiconductor for $1.5 billion in cash. Analog Devices is aiming to expand its AI-focused high-density power management solutions for hyperscalers and data centers. Such initiatives may impact Monolithic’s initiatives in the power management space.
Semiconductor manufacturing also requires substantial capital investments to drive innovation and maintain a competitive edge in the long term. This pressure on profitability is particularly high during periods of industry downturns.
Monolithic derives a substantial portion of revenues from Asia, making results sensitive to foreign exchange movements, tariffs and changing trade policies. Management continues to highlight geopolitical and macroeconomic uncertainty, particularly surrounding export controls and evolving global tariff policies.
How Do the Estimates Compare for QCOM & MPWR?
The Zacks Consensus Estimate for Monolithic’s 2026 sales and EPS indicates year-over-year growth of 32.78% and 35.3%, respectively. The EPS estimates for 2026 have remained unchanged over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Qualcomm’s 2026 sales and EPS implies a year-over-year decline of 3.44% and 10.47%, respectively. The EPS estimates for 2026 have remain unchanged over the past 60 days.
Image Source: Zacks Investment Research
Price Performance & Valuation of QCOM & MPWR
Over the past year, Monolithic has increased 85.6%, while Qualcomm has increased 20.1%.
Image Source: Zacks Investment Research
Qualcomm looks more attractive than Monolithic from a valuation standpoint. Going by the price/earnings ratio, QCOM’s shares currently trade at 17.51 forward earnings, significantly lower than 51.28 for Monolithic.
Image Source: Zacks Investment Research
QCOM or MPWR: Which Is a Better Pick?
Both Qualcomm and Monolithic carry a Zacks Rank 3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Qualcomm and Monolithic are taking several steps to strengthen their portfolio and gain from expanding their AI data center portfolio. Monolithic is venturing into high-growth markets such as robotics and physical AI. However, competition remains intense across power management, AI infrastructure and communications applications, where customers often require aggressive pricing and rapid innovation cycles. Qualcomm’s aggressive approach to diversify its revenue base, a comprehensive AI infrastructure roadmap spanning CPUs, inference accelerators and networking bodes well for long-term growth. Owing to these factors, a diverse portfolio and better valuation, Qualcomm is a better investment option at present.