Here’s What Makes Monolithic Power Systems (MPWR) an Investment Bet?

Baron Funds released its “Baron Durable Advantage Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund primarily focuses on investing in securities of large-sized companies. The fund increased 15.6% (Institutional Shares) in the second quarter compared to a 10.9% return for the S&P 500 Index (the Index). The Fund is up 7.5%, year to date, compared to the 6.2% gain for the Index. After two consecutive years of strong market recovery, there was a correction at the end of the first quarter and the early part of the second quarter. But later in the second quarter, the market rebounded meaningfully. For more information on the fund’s best picks in 2025, please check its top five holdings.

In its second-quarter 2025 investor letter, the Baron Durable Advantage Fund highlighted stocks such as Monolithic Power Systems, Inc. (NASDAQ:MPWR). Monolithic Power Systems, Inc. (NASDAQ:MPWR) is a semiconductor-based power electronics solutions provider. The one-month return of Monolithic Power Systems, Inc. (NASDAQ:MPWR) was 14.84%, and its shares lost 12.34% of their value over the last 52 weeks. On August 21, 2025, Monolithic Power Systems, Inc. (NASDAQ:MPWR) stock closed at $820.74 per share, with a market capitalization of $39.307 billion.

Baron Durable Advantage Fund stated the following regarding Monolithic Power Systems, Inc. (NASDAQ:MPWR) in its second quarter 2025 investor letter:

“Very briefly on the other, smaller adds to existing investments during the second quarter. Fabless analog and power semiconductor company Monolithic Power Systems, Inc. – we like Monolithic Power Systems, Inc.’s (NASDAQ:MPWR) consistent above industry growth and its attractive end market exposure and have taken advantage of short-term volatility to add to our position.”

Is Monolithic Power Systems, Inc. (MPWR) the Cheap Semiconductor Stock to Buy Now?

An engineer examining a DC to DC integrated circuit board, looking for any flaws.

Monolithic Power Systems, Inc. (NASDAQ:MPWR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 41 hedge fund portfolios held Monolithic Power Systems, Inc. (NASDAQ:MPWR) at the end of the second quarter, which was 47 in the previous quarter. Monolithic Power Systems, Inc. (NASDAQ:MPWR) reported record revenue of $664.6 million in the second quarter of 2025, 4.2% higher than the first quarter of 2025 and 31.0% higher than Q2 2024. While we acknowledge the risk and potential of Monolithic Power Systems, Inc. (NASDAQ:MPWR) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Monolithic Power Systems, Inc. (NASDAQ:MPWR) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Monolithic Power Systems, Inc. (NASDAQ:MPWR) and shared the list of best growth stocks to buy for the next 10 years. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.