Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at Monolithic Power Systems (NASDAQ:MPWR) and its peers.

Demand for analog chips is generally linked to the overall level of economic growth, as analog chips serve as the building blocks of most electronic goods and equipment. Unlike digital chip designers, analog chip makers tend to produce the majority of their own chips, as analog chip production does not require expensive leading edge nodes. Less dependent on major secular growth drivers, analog product cycles are much longer, often 5-7 years.

The 15 analog semiconductors stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1% while next quarter’s revenue guidance was 1.2% below.

The Fed cut its policy rate by 50bps (half a percent) in September 2024, the first in roughly four years. This marks the end of its most pointed inflation-busting campaign since the 1980s. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be assessing whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.

While some analog semiconductors stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1% since the latest earnings results.

Monolithic Power Systems (NASDAQ:MPWR)

Founded in 1997 by its longtime CEO Michael Hsing, Monolithic Power Systems (NASDAQ:MPWR) is an analog and mixed signal chipmaker that specializes in power management chips meant to minimize total energy consumption.

Monolithic Power Systems reported revenues of $507.4 million, up 15% year on year. This print exceeded analysts’ expectations by 3.4%. Overall, it was a strong quarter for the company with optimistic revenue guidance for the next quarter and a decent beat of analysts’ EPS estimates.

“As we have emphasized for many years, our results reflect the continued success of our proven, long-term growth strategy and our transformation from being only a chip supplier to a full solutions provider,” said Michael Hsing, CEO and founder of MPS.

Interestingly, the stock is up 15.2% since reporting and currently trades at $906.

Read why we think that Monolithic Power Systems is one of the best analog semiconductors stocks, our full report is free.

Best Q2: Himax (NASDAQ:HIMX)

Taiwan-based Himax Technologies (NASDAQ:HIMX) is a leading manufacturer of display driver chips and timing controllers used in TVs, laptops, and mobile phones.