Shares of chipmaker Monolithic Power Systems (MPWR 7.71%) rallied on Friday despite a down day for the markets, up 7.3% as of 1:30 p.m. ET.

Monolithic held its fourth-quarter earnings call last night, beating expectations and delivering better-than-expected guidance. The stock had also fallen into the end of the year based on fears of share losses in Nvidia's Blackwell product line, so it was perhaps primed for a bounce back.

Monolithic's diversified power management in high demand

In the fourth quarter, Monolithic's revenue grew 36.9% year over year to $621.7 million, while non-GAAP (adjusted) earnings per share was up 42% to $4.09. Management also guided for between $610 million and $630 million in first-quarter revenue, above the average estimate of $578.1 million.

Monolithic plunged late last year on rumors it lost market share in power modules for Nvidia's B200/GB200 platform. This caused such a move in the stock because Monolithic's enterprise data segment, which is levered to artificial intelligence (AI) data centers, had grown to become its largest, making up 32.5% of revenue in 2024, up from just 17.7% in 2023.

However, management guided above expectations due to the company's other segments remaining strong. Last quarter, auto revenue was up 43%, communications 22.9%, and industrial chips 22.3%. Those numbers indicate Monolithic is perhaps making more long-term share gains in these applications, and that these segments may be coming out of their down cycle.

Finally, management also said that while the first half of the year may be soft for the enterprise data segment, the back half should be stronger across a number of customers, and not just Nvidia, making for a flattish overall year after that segment gained 121.7% in 2024.

Analysts up their targets

While it does appear Monolithic is no longer the sole supplier for Nvidia's Blackwell B200 platform, even a lower market share in this growth area should lead to strong results. In the wake of earnings, KeyBanc analyst John Vinh raised his price target on Monolithic to $850 per share, up from $700.

Vinh noted that while the company likely lost share on the Blackwell B200 platform, it could regain share in the Blackwell Ultra platform later in the year.

All in all, Monolithic delivered solid results and its share loss wasn't as bad as feared. That being said, the stock looks somewhat expensive, at 42 times 2025 earnings estimates.