Home > Comparison > Technology > AMD vs MPWR
The strategic rivalry between Advanced Micro Devices, Inc. (AMD) and Monolithic Power Systems, Inc. (MPWR) shapes the semiconductor industry’s direction. AMD operates as a diversified semiconductor powerhouse, focusing on high-performance computing and graphics. MPWR, by contrast, specializes in power management ICs, offering niche, high-margin solutions. This analysis pits broad-based innovation against specialized expertise to identify which trajectory delivers superior risk-adjusted returns for a balanced portfolio.
Table of contents
Companies Overview
Advanced Micro Devices and Monolithic Power Systems both shape the semiconductor landscape with distinct approaches and scale.
Advanced Micro Devices, Inc.: Global Semiconductor Powerhouse
Advanced Micro Devices dominates as a semiconductor leader with a $340B market cap. It generates revenue through diverse processors, GPUs, and semi-custom SoC products for PCs, servers, and game consoles. In 2026, AMD’s strategic focus remains on innovation across computing and graphics segments to capture high-performance and data center markets.
Monolithic Power Systems, Inc.: Niche Power Electronics Specialist
Monolithic Power Systems excels in power management ICs, boasting a $59B market cap. Its core revenue comes from DC-to-DC converters and lighting control ICs serving computing, automotive, and industrial sectors. In 2026, MPWR targets expanding its footprint in integrated power solutions for portable electronics and automotive applications globally.
Strategic Collision: Similarities & Divergences
AMD pursues broad computing and graphics dominance via high-performance chips, while MPWR focuses on specialized power electronics with efficient voltage control. Their primary battleground is semiconductor innovation but in different niches—AMD in processors and GPUs, MPWR in power management. This divergence creates distinct investment profiles: AMD offers scale and market breadth, MPWR provides targeted growth in specialized components.
Income Statement Comparison
This data dissects the core profitability and scalability of both corporate engines to reveal who dominates the bottom line:
| Metric | Advanced Micro Devices, Inc. (AMD) | Monolithic Power Systems, Inc. (MPWR) |
|---|---|---|
| Revenue | 34.6B | 2.79B |
| Cost of Revenue | 17.5B | 1.25B |
| Operating Expenses | 13.5B | 811M |
| Gross Profit | 17.2B | 1.54B |
| EBITDA | 7.28B | 780M |
| EBIT | 4.27B | 729M |
| Interest Expense | 131M | 0 |
| Net Income | 4.34B | 616M |
| EPS | 2.67 | 12.82 |
| Fiscal Year | 2025 | 2025 |
Income Statement Analysis: The Bottom-Line Duel
This income statement comparison will uncover which company operates with greater efficiency and profitability over recent years.
Advanced Micro Devices, Inc. Analysis
AMD’s revenue surged from $16.4B in 2021 to $34.6B in 2025, showcasing robust growth. Net income expanded from $3.16B to $4.34B, reflecting strong bottom-line momentum. Gross margin holds steady near 49.5%, while net margin improved to 12.5%. The 2025 year highlights efficient cost management and a doubling of EBIT, signaling accelerating profitability.
Monolithic Power Systems, Inc. Analysis
MPWR’s revenue more than doubled from $1.21B in 2021 to $2.79B in 2025, accompanied by net income growth from $242M to $616M. It boasts a superior gross margin of 55.2% and a strong net margin above 22%. Despite slower net margin growth recently, MPWR sustains healthy EBIT expansion and maintains tight operating expense control, illustrating solid operational efficiency.
Margin Power vs. Revenue Scale
AMD delivers impressive revenue scale and rapid EBIT growth, but MPWR leads on margin strength and consistent profitability ratios. AMD’s momentum suits investors focused on growth, whereas MPWR’s superior margins appeal to those prioritizing efficiency and stable returns. Each profile offers distinct value depending on investment goals.
Financial Ratios Comparison
These vital ratios act as a diagnostic tool to expose the underlying fiscal health, valuation premiums, and capital efficiency of the companies compared below:
| Ratios | Advanced Micro Devices, Inc. (AMD) | Monolithic Power Systems, Inc. (MPWR) |
|---|---|---|
| ROE | 6.9% | 16.6% |
| ROIC | 5.4% | 14.9% |
| P/E | 80.5 | 70.7 |
| P/B | 5.54 | 11.7 |
| Current Ratio | 2.85 | 5.91 |
| Quick Ratio | 2.01 | 4.38 |
| D/E | 0.06 | 0 |
| Debt-to-Assets | 5.0% | 0 |
| Interest Coverage | 28.2 | 0 |
| Asset Turnover | 0.45 | 0.65 |
| Fixed Asset Turnover | 14.98 | 4.45 |
| Payout ratio | 0 | 46.2% |
| Dividend yield | 0 | 0.65% |
| Fiscal Year | 2025 | 2025 |
Efficiency & Valuation Duel: The Vital Signs
Financial ratios serve as a company’s DNA, exposing operational strengths and hidden risks vital for investment decisions.
Advanced Micro Devices, Inc.
AMD displays moderate profitability with a 6.88% ROE and a 12.51% net margin, but its valuation metrics appear stretched. The P/E of 80.54 and P/B of 5.54 suggest an expensive stock. AMD avoids dividends, instead reinvesting heavily in R&D, fueling future growth and innovation.
Monolithic Power Systems, Inc.
MPWR posts strong profitability with a 16.55% ROE and 22.07% net margin, though its valuation remains elevated. The P/E stands at 70.69 and P/B at 11.7, indicating a premium price. It returns some value via a modest 0.65% dividend yield while maintaining a robust reinvestment focus on R&D.
Premium Valuation vs. Operational Safety
MPWR commands higher profitability and a favorable overall ratio profile despite a higher P/B ratio. AMD’s valuation is more stretched with weaker returns on equity. MPWR balances risk and reward better, suiting investors prioritizing operational efficiency and modest income. AMD fits those focused on growth through innovation.
Which one offers the Superior Shareholder Reward?
I see that AMD pays no dividends and focuses on reinvestment into R&D and growth, supported by a solid free cash flow per share of 4.15 in 2025. Conversely, MPWR offers a modest dividend yield around 0.65% with payout ratios near 46%, alongside consistent buybacks implied by steady free cash flow. Historically, MPWR’s distribution model balances income and growth, while AMD’s zero payout signals aggressive reinvestment. Given MPWR’s sustainable dividend coverage and moderate payout, I conclude MPWR delivers a more attractive total shareholder return profile for 2026 investors.
Comparative Score Analysis: The Strategic Profile
The radar chart reveals the fundamental DNA and trade-offs of Advanced Micro Devices, Inc. (AMD) and Monolithic Power Systems, Inc. (MPWR):
AMD and MPWR share a moderate overall score and equal DCF scores, showing comparable valuation discipline. MPWR leads on ROE (4 vs. 3) and ROA (5 vs. 4), indicating superior asset and equity efficiency. However, MPWR’s debt-to-equity score of 1 signals higher leverage risk, contrasting with AMD’s moderate 3 score. Both firms suffer from very unfavorable P/E ratios, but AMD holds a slight edge on P/B valuation (2 vs. 1). AMD offers a more balanced financial profile; MPWR relies heavily on operational efficiency but carries greater financial risk.
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Bankruptcy Risk: Solvency Showdown
The Altman Z-Score comparison highlights a strong solvency gap favoring MPWR’s 63.2 over AMD’s 15.0, both in the safe zone:
Historically in tech sectors, a higher Z-Score signals robust long-term survival. MPWR’s exceptional score reflects rock-solid financial stability and minimal bankruptcy risk. AMD, while safe, shows a significantly lower margin of safety amid cyclical volatility.
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Financial Health: Quality of Operations
Piotroski F-Scores reveal AMD’s stronger internal financial quality with a 7, compared to MPWR’s average 5:
AMD’s higher score suggests better profitability, liquidity, and operational efficiency. MPWR’s middling score raises caution on internal metrics, signaling potential red flags relative to AMD’s healthier financial footing.
How are the two companies positioned?
This section dissects AMD and MPWR’s operational DNA by comparing their revenue distribution and internal strengths and weaknesses. The goal is to confront their economic moats to reveal which model sustains the most durable competitive advantage.
Revenue Segmentation: The Strategic Mix
The following comparison dissects how Advanced Micro Devices, Inc. (AMD) and Monolithic Power Systems, Inc. (MPWR) diversify their income streams and where their primary sector bets lie:
AMD anchors its revenue in two robust segments: Data Center at $16.6B and Client and Gaming at $14.6B, showing a balanced dual-core focus. In contrast, MPWR pivots heavily on DC To DC Products with $1.72B, dwarfing its Lighting Control Products at just $102M. AMD’s diversified portfolio mitigates concentration risk and leverages ecosystem lock-in, while MPWR’s dominance in one segment signals infrastructure specialization but elevates exposure to market shifts in power management.
Strengths and Weaknesses Comparison
This table compares the Strengths and Weaknesses of AMD and MPWR:
AMD Strengths
- Diversified revenue across Client, Data Center, Embedded, and Gaming segments
- Strong global presence including US, China, Taiwan
- Favorable liquidity ratios with current ratio 2.85 and quick ratio 2.01
- Low debt levels with debt-to-assets at 5%
- Favorable interest coverage at 32.6
- Favorable fixed asset turnover at 14.98
MPWR Strengths
- Favorable profitability with net margin 22.07%, ROE 16.55%, and ROIC 14.93%
- Zero debt and excellent interest coverage
- Strong quick ratio at 4.38
- Growing revenue in DC to DC and Lighting Control Products
- Global presence in China, Taiwan, Korea, and US
- Favorable fixed asset turnover at 4.45
AMD Weaknesses
- Unfavorable ROE at 6.88% below WACC of 12.8% signals weak capital efficiency
- High P/E and P/B ratios suggest overvaluation risk
- Unfavorable asset turnover at 0.45 implies less efficient asset use
- No dividend yield may deter income-focused investors
MPWR Weaknesses
- Unfavorable current ratio at 5.91 is abnormally high, possibly inefficient asset use
- High P/B ratio at 11.7 indicates valuation risk
- WACC at 10.63% slightly unfavorable compared to ROIC
- Low dividend yield at 0.65%
Both companies show strengths in innovation and global presence but differ in capital efficiency and valuation metrics. AMD’s broader diversification contrasts with MPWR’s superior profitability and balance sheet strength. These factors shape their strategic focus on growth versus financial discipline.
The Moat Duel: Analyzing Competitive Defensibility
A durable structural moat shields long-term profits from relentless competition and market disruption. Let’s dissect the moats protecting these two semiconductor players:
Advanced Micro Devices, Inc. (AMD): Innovation-Driven Scale Advantage
AMD’s moat hinges on product innovation and brand strength, driving strong gross margins near 50%. However, its ROIC trails below WACC, signaling value destruction. Expansion in data centers and gaming GPUs tests this moat’s sustainability in 2026.
Monolithic Power Systems, Inc. (MPWR): Niche Power Efficiency Specialist
MPWR’s moat stems from specialized power management ICs with high gross margin (55%) and EBIT margin (26%). Unlike AMD, MPWR creates value with ROIC exceeding WACC by 4.3%. Its focus on automotive and industrial markets could deepen moat amid growing electrification.
Innovation Scale vs. Specialized Efficiency: The Moat Face-Off
MPWR holds the deeper economic moat with positive ROIC spread, despite a mild decline in profitability. AMD’s innovation scale impresses, but its negative ROIC gap signals vulnerability. MPWR better defends market share through efficient capital use and niche dominance.
Which stock offers better returns?
The past year shows distinct price momentum differences between Advanced Micro Devices, Inc. and Monolithic Power Systems, Inc., with both stocks accelerating but diverging markedly in gains.
Trend Comparison
Advanced Micro Devices, Inc. displays a 9.1% price rise over the past 12 months, confirming a bullish trend with acceleration and a high volatility level at 41.06%. Its price ranged from 85.76 to 259.68.
Monolithic Power Systems, Inc. achieved a 79.02% increase over the same period, also bullish with accelerating gains and much higher volatility at 150.74%. Prices fluctuated between 477.39 and 1229.82.
Comparatively, Monolithic Power Systems delivered the highest market performance, significantly outperforming Advanced Micro Devices in price appreciation and recent momentum.
Target Prices
Analysts maintain a positive outlook with clear upside potential for both Advanced Micro Devices, Inc. and Monolithic Power Systems, Inc.
| Company | Target Low | Target High | Consensus |
|---|---|---|---|
| Advanced Micro Devices, Inc. | 230 | 380 | 291.2 |
| Monolithic Power Systems, Inc. | 1200 | 1500 | 1313.71 |
The consensus targets exceed current prices by 40%+ for AMD and about 7% for MPWR, signaling stronger growth expectations for AMD.
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How do institutions grade them?
The following tables summarize recent institutional grades for Advanced Micro Devices, Inc. and Monolithic Power Systems, Inc.:
Advanced Micro Devices, Inc. Grades
This table shows the latest grades from established financial firms for AMD:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Wedbush | maintain | Outperform | 2026-02-04 |
| Benchmark | maintain | Buy | 2026-02-04 |
| Evercore ISI Group | maintain | Outperform | 2026-02-04 |
| Rosenblatt | maintain | Buy | 2026-02-04 |
| Keybanc | maintain | Overweight | 2026-02-04 |
| Morgan Stanley | maintain | Equal Weight | 2026-02-04 |
| Wells Fargo | maintain | Overweight | 2026-01-30 |
| Piper Sandler | maintain | Overweight | 2026-01-26 |
| UBS | maintain | Buy | 2026-01-26 |
| Bernstein | maintain | Market Perform | 2026-01-21 |
Monolithic Power Systems, Inc. Grades
This table presents recent institutional grades for MPWR from reliable sources:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Truist Securities | maintain | Buy | 2026-02-06 |
| Keybanc | maintain | Overweight | 2026-02-06 |
| Rosenblatt | maintain | Neutral | 2026-02-06 |
| Wells Fargo | maintain | Overweight | 2026-02-06 |
| Needham | maintain | Buy | 2026-02-06 |
| Stifel | maintain | Buy | 2026-02-04 |
| Wells Fargo | maintain | Overweight | 2026-01-26 |
| Wells Fargo | upgrade | Overweight | 2026-01-15 |
| Truist Securities | maintain | Buy | 2025-12-19 |
| Citigroup | maintain | Buy | 2025-11-03 |
Which company has the best grades?
Both companies receive mostly positive grades, but AMD’s ratings include multiple “Outperform” and “Buy” from top-tier firms. MPWR holds consistent “Buy” and “Overweight” ratings but also a “Neutral.” AMD’s stronger consensus could influence investor confidence in stability and growth potential.
Risks specific to each company
The following categories identify critical pressure points and systemic threats facing both firms in the 2026 market environment:
1. Market & Competition
Advanced Micro Devices, Inc.
- Faces intense competition in high-performance CPUs and GPUs with aggressive innovation cycles.
Monolithic Power Systems, Inc.
- Competes in niche power electronics with less direct rivalry but limited market scale.
2. Capital Structure & Debt
Advanced Micro Devices, Inc.
- Maintains low debt-to-equity ratio (0.06), indicating strong balance sheet discipline.
Monolithic Power Systems, Inc.
- Zero debt enhances financial stability but may limit leverage benefits.
3. Stock Volatility
Advanced Micro Devices, Inc.
- Exhibits high beta (1.94), implying sensitivity to market swings and higher risk.
Monolithic Power Systems, Inc.
- Lower beta (1.46) suggests more stable stock price behavior versus sector peers.
4. Regulatory & Legal
Advanced Micro Devices, Inc.
- Subject to stringent global semiconductor export controls and intellectual property risks.
Monolithic Power Systems, Inc.
- Faces regulatory scrutiny in power electronics, especially automotive and industrial standards.
5. Supply Chain & Operations
Advanced Micro Devices, Inc.
- Relies heavily on advanced foundries with geopolitical supply chain vulnerabilities.
Monolithic Power Systems, Inc.
- Benefits from diversified suppliers but exposed to raw material cost fluctuations.
6. ESG & Climate Transition
Advanced Micro Devices, Inc.
- Increasing pressure to reduce carbon footprint in manufacturing and data center energy use.
Monolithic Power Systems, Inc.
- Positioned well with energy-efficient power solutions aiding climate transition demands.
7. Geopolitical Exposure
Advanced Micro Devices, Inc.
- High exposure to US-China tensions affecting supply chains and market access.
Monolithic Power Systems, Inc.
- Global footprint diversified but still susceptible to Asia-Pacific geopolitical risks.
Which company shows a better risk-adjusted profile?
Monolithic Power Systems faces less market volatility and has a stronger capital structure, but its limited scale constrains growth potential. AMD’s competitive intensity and geopolitical risks weigh heavily despite a robust balance sheet. MPWR’s lower beta and zero debt favor a superior risk-adjusted profile. Notably, AMD’s stock beta near 2 signals pronounced sensitivity to market cycles, justifying investor caution amid semiconductor sector turbulence.
Final Verdict: Which stock to choose?
Advanced Micro Devices, Inc. (AMD) stands out for its unmatched ability to drive rapid revenue and earnings growth in a highly competitive semiconductor landscape. Its efficiency in capital allocation is a strength, though the consistent value destruction reflected by ROIC below WACC remains a point of vigilance. AMD suits aggressive growth portfolios aiming to capitalize on tech innovation cycles.
Monolithic Power Systems, Inc. (MPWR) impresses with a strategic moat rooted in high returns on invested capital and strong operational margins, underpinned by a robust balance sheet. Its financial stability outshines AMD’s, offering a safer harbor. MPWR fits well for Growth at a Reasonable Price (GARP) investors seeking solid profitability with moderate risk.
If you prioritize rapid expansion and market share gains, AMD is the compelling choice due to its dynamic growth engine despite profitability challenges. However, if you seek better stability and value creation over time, MPWR offers superior financial discipline and operational efficiency, commanding a premium valuation for its moat. Both choices require careful risk assessment aligned with investor appetite.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Advanced Micro Devices, Inc. and Monolithic Power Systems, Inc. to enhance your investment decisions:
