Home > Comparison > Technology > MPWR vs AMBA
The strategic rivalry between Monolithic Power Systems, Inc. and Ambarella, Inc. shapes the semiconductor industry’s evolution. Monolithic Power excels as a diversified power electronics innovator, while Ambarella focuses on high-performance video processing chips. This head-to-head reflects a contest between broad market integration and specialized growth. I will analyze which company presents a superior risk-adjusted opportunity for investors seeking balance between innovation and operational resilience.
Table of contents
Companies Overview
Monolithic Power Systems and Ambarella both play pivotal roles in the semiconductor sector, shaping critical technology segments.
Monolithic Power Systems, Inc.: Power Electronics Innovator
Monolithic Power Systems dominates the power electronics niche by designing semiconductor-based DC to DC integrated circuits. Its revenue stems primarily from supplying voltage conversion and control solutions across computing, automotive, and industrial markets. In 2026, the company’s strategic focus centers on expanding its footprint in automotive and communications sectors while enhancing energy-efficient product lines.
Ambarella, Inc.: Vision Processing Pioneer
Ambarella leads the video semiconductor market with system-on-a-chip solutions integrating HD video, AI vision, and image processing. Its core revenue engine leverages applications in automotive cameras, security, robotics, and consumer electronics. In 2026, Ambarella emphasizes advancing its AI-driven computer vision technologies to strengthen autonomous vehicle and industrial automation capabilities.
Strategic Collision: Similarities & Divergences
Both firms innovate within semiconductors but diverge sharply: Monolithic targets power management, Ambarella focuses on vision processing. They compete on enabling smarter, more efficient electronic systems yet address distinct customer needs. Investors should note Monolithic’s broader industrial reach contrasts with Ambarella’s specialized AI-centric growth, defining their unique risk and growth profiles.
Income Statement Comparison
This data dissects the core profitability and scalability of both corporate engines to reveal who dominates the bottom line:
| Metric | Monolithic Power Systems, Inc. (MPWR) | Ambarella, Inc. (AMBA) |
|---|---|---|
| Revenue | 2.79B | 285M |
| Cost of Revenue | 1.25B | 113M |
| Operating Expenses | 811M | 299M |
| Gross Profit | 1.54B | 172M |
| EBITDA | 780M | -101M |
| EBIT | 729M | -127M |
| Interest Expense | 0 | 0 |
| Net Income | 616M | -117M |
| EPS | 12.82 | -2.84 |
| Fiscal Year | 2025 | 2025 |
Income Statement Analysis: The Bottom-Line Duel
This income statement comparison exposes each company’s operational efficiency and profitability in a rapidly evolving market landscape.
Monolithic Power Systems, Inc. Analysis
Monolithic Power Systems (MPWR) shows robust revenue growth, climbing from $1.21B in 2021 to $2.79B in 2025. Its gross margin holds steady at a favorable 55.18%, reflecting strong cost control. Despite a one-year net margin decline in 2025, MPWR’s net income more than doubled over five years, signaling healthy long-term momentum and operational leverage.
Ambarella, Inc. Analysis
Ambarella (AMBA) delivers consistent revenue growth, increasing 26% year-over-year to $285M in 2025, with a high gross margin of 60.5%. However, it struggles with profitability, posting a negative net margin of -41.12% in 2025 and net losses over the period. While recent margin improvement and EPS growth hint at operational progress, its bottom line remains under pressure.
Margin Strength vs. Profitability Struggles
MPWR clearly outperforms AMBA in profitability, showcasing superior net margins and sustained income growth. AMBA’s higher gross margin cannot offset its large operating losses. For investors prioritizing earnings quality and margin resilience, MPWR’s profile offers greater fundamental appeal despite AMBA’s revenue momentum.
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 | Monolithic Power Systems, Inc. (MPWR) | Ambarella, Inc. (AMBA) |
|---|---|---|
| ROE | 16.6% | -20.9% |
| ROIC | 14.9% | -21.9% |
| P/E | 70.7 | -27.1 |
| P/B | 11.7 | 5.64 |
| Current Ratio | 5.91 | 2.65 |
| Quick Ratio | 4.38 | 2.36 |
| D/E | 0.00 | 0.0094 |
| Debt-to-Assets | 0.00 | 0.0076 |
| Interest Coverage | 0 (not reported) | 0 (not reported) |
| Asset Turnover | 0.65 | 0.41 |
| Fixed Asset Turnover | 4.45 | 19.96 |
| Payout ratio | 46.2% | 0% |
| Dividend yield | 0.65% | 0% |
| Fiscal Year | 2025 | 2025 |
Efficiency & Valuation Duel: The Vital Signs
Financial ratios act as a company’s DNA, exposing hidden risks and revealing operational strengths crucial for investment decisions.
Monolithic Power Systems, Inc.
Monolithic Power Systems delivers strong profitability with a 16.55% ROE and a solid 22.07% net margin. However, its valuation appears stretched, sporting a high P/E of 70.69 and P/B of 11.7. The company supports shareholder returns modestly with a 0.65% dividend yield, while heavily reinvesting in R&D to fuel growth and innovation.
Ambarella, Inc.
Ambarella struggles with negative profitability, showing a -20.86% ROE and a -41.12% net margin, reflecting operational challenges. Its valuation metrics include a negative P/E of -27.05, signaling losses, yet a more reasonable P/B ratio of 5.64. The absence of dividends aligns with aggressive reinvestment in R&D, aiming to reverse its unfavorable financial trends.
Premium Valuation vs. Operational Safety
Monolithic Power Systems offers a favorable profitability profile but trades at a premium, risking valuation concerns. Ambarella presents higher operational risk with negative returns and no dividend support. Investors seeking growth with operational stability may prefer Monolithic, while those favoring turnaround potential might consider Ambarella’s profile.
Which one offers the Superior Shareholder Reward?
I compare Monolithic Power Systems (MPWR) and Ambarella (AMBA) on dividends and buybacks. MPWR pays a modest dividend yield around 0.65% with a sustainable payout ratio near 46%. It complements dividends with active buybacks, enhancing total returns. AMBA pays no dividends, focusing on reinvestment amid losses and negative margins. Its buyback activity is minimal, reflecting constrained cash flow. Historically, MPWR’s balanced distribution and strong free cash flow underpin a more durable shareholder reward. I conclude MPWR offers a superior total return profile in 2026 due to its consistent, prudent capital allocation and shareholder-friendly distributions.
Comparative Score Analysis: The Strategic Profile
The radar chart reveals the fundamental DNA and trade-offs of Monolithic Power Systems and Ambarella, highlighting each firm’s strategic strengths and vulnerabilities:
Monolithic Power Systems (MPWR) exhibits strong operational efficiency with high ROE (4) and ROA (5) scores, but its financial risk is elevated by a very unfavorable debt-to-equity score (1) and weak valuation metrics (PE and PB both 1). Ambarella (AMBA) shows a conservative balance sheet with a favorable debt-to-equity score (4), though it suffers from poor profitability metrics (ROE and ROA scores at 1) and moderate valuation. MPWR has a more balanced operational profile but carries higher leverage risk, while AMBA relies on financial stability rather than earnings strength.
Bankruptcy Risk: Solvency Showdown
Monolithic Power Systems’ Altman Z-Score of 63.2 far exceeds Ambarella’s 10.1, placing both securely in the safe zone but emphasizing MPWR’s superior long-term solvency:
Financial Health: Quality of Operations
Monolithic Power Systems scores a 5 on the Piotroski scale, reflecting average financial health. Ambarella’s weaker 3 signals potential red flags in profitability and internal efficiency:
How are the two companies positioned?
This section dissects the operational DNA of MPWR and AMBA by comparing their revenue distribution by segment and internal strengths and weaknesses. The goal is to confront their economic moats to identify which model delivers the most resilient, sustainable competitive advantage today.
Revenue Segmentation: The Strategic Mix
This visual comparison dissects how Monolithic Power Systems, Inc. and Ambarella, Inc. diversify their income streams and where their primary sector bets lie:
Monolithic Power Systems anchors its revenue in DC To DC Products, generating $1.72B in 2023, dwarfing its Lighting Control segment at $102M. This concentration reflects a strong infrastructure niche with ecosystem lock-in but poses concentration risk. Ambarella lacks available data, so I cannot assess its revenue diversification or strategic positioning against MPWR’s clear product focus.
Strengths and Weaknesses Comparison
This table compares the Strengths and Weaknesses of Monolithic Power Systems, Inc. and Ambarella, Inc.:
MPWR Strengths
- Strong profitability with 22.07% net margin and 16.55% ROE
- Favorable ROIC at 14.93% above WACC
- Zero debt and infinite interest coverage
- High quick ratio at 4.38 indicating liquidity
- Diversified product base with strong DC to DC segment
- Broad global presence especially in China and Taiwan
AMBA Strengths
- Favorable price-to-earnings ratio (negative PE indicating potential turnaround)
- Moderate leverage with low debt-to-assets at 0.76%
- Positive current and quick ratios showing liquidity
- High fixed asset turnover at 19.96 reflecting asset efficiency
- Presence in Asia Pacific and Taiwan markets
- Some diversification in geographic revenue streams
MPWR Weaknesses
- Unfavorable high WACC at 10.63% exceeding ROIC
- Very high valuation multiples: PE 70.69, PB 11.7
- Extremely high current ratio at 5.91 may indicate inefficient asset use
- Low dividend yield at 0.65%
- Asset turnover moderate at 0.65 limiting efficiency gains
AMBA Weaknesses
- Negative profitability metrics: -41.12% net margin, -20.86% ROE, -21.96% ROIC
- Zero interest coverage posing financial risk
- Unfavorable WACC at 12.9% and PB at 5.64
- Lack of dividend yield
- Low asset turnover at 0.41 questions operational efficiency
Overall, MPWR demonstrates strong profitability and liquidity with zero debt, but faces valuation and capital efficiency challenges. AMBA struggles with profitability and financial coverage, yet shows some operational efficiency and liquidity. These contrasts highlight different strategic priorities and risk profiles for each company.
The Moat Duel: Analyzing Competitive Defensibility
A structural moat is the only reliable barrier protecting long-term profits from relentless competitive erosion:
Monolithic Power Systems, Inc. (MPWR): Cost Advantage and Integration Excellence
MPWR’s moat stems from its cost-efficient, integrated power electronics solutions. High ROIC above WACC confirms value creation, though profitability shows a recent decline. Expansion into automotive and industrial markets may deepen this moat in 2026.
Ambarella, Inc. (AMBA): Specialized Intellectual Property in Video Processing
AMBA relies on its proprietary video AI chips, contrasting MPWR’s cost advantage. However, negative ROIC versus WACC indicates value destruction. Despite recent improvements, AMBA faces uphill battles in profitability but could disrupt markets with AI-driven camera solutions.
Moat Strength: Cost Efficiency vs. IP Innovation
MPWR’s wider moat, backed by consistent value creation and scale, outmatches AMBA’s shrinking and loss-making competitive edge. MPWR stands better poised to defend and grow its market share amid intensifying semiconductor competition.
Which stock offers better returns?
Over the past year, Monolithic Power Systems, Inc. and Ambarella, Inc. displayed distinct price dynamics, with MPWR showing strong gains and AMBA facing recent declines amid differing trading volumes.
Trend Comparison
Monolithic Power Systems, Inc. exhibits a bullish trend with a 79.02% price increase over 12 months, showing acceleration and high volatility, peaking at 1229.82 and bottoming at 477.39. Ambarella, Inc. also shows a bullish trend over 12 months with a 29.48% gain but reveals deceleration and lower volatility; its recent trend is bearish with a 26.12% drop since November 2025. Comparing both, MPWR outperforms AMBA with stronger overall growth and recent positive momentum, delivering the highest market returns in this period.
Target Prices
Analysts set a moderately bullish consensus for Monolithic Power Systems and Ambarella based on current valuations.
| Company | Target Low | Target High | Consensus |
|---|---|---|---|
| Monolithic Power Systems, Inc. | 1,200 | 1,500 | 1,314 |
| Ambarella, Inc. | 80 | 115 | 97.5 |
Monolithic Power Systems’ consensus target is about 7% above its current price of $1,230, signaling modest upside. Ambarella’s target consensus at $97.5 exceeds its $63.64 price by over 50%, reflecting stronger growth expectations.
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How do institutions grade them?
The following tables summarize the latest institutional grades for Monolithic Power Systems, Inc. and Ambarella, Inc.:
Monolithic Power Systems, Inc. Grades
Below are recent grades assigned by reputable grading companies for Monolithic Power Systems, Inc.
| 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 |
Ambarella, Inc. Grades
Below are recent grades assigned by reputable grading companies for Ambarella, Inc.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Stifel | maintain | Buy | 2025-11-26 |
| Rosenblatt | maintain | Buy | 2025-11-26 |
| B of A Securities | maintain | Neutral | 2025-11-26 |
| Needham | maintain | Buy | 2025-11-26 |
| Rosenblatt | maintain | Buy | 2025-11-24 |
| Northland Capital Markets | maintain | Outperform | 2025-08-29 |
| Morgan Stanley | maintain | Overweight | 2025-08-29 |
| Rosenblatt | maintain | Buy | 2025-08-29 |
| Stifel | maintain | Buy | 2025-08-29 |
| Oppenheimer | maintain | Perform | 2025-08-29 |
Which company has the best grades?
Monolithic Power Systems, Inc. consistently receives strong “Buy” and “Overweight” ratings from multiple institutions, indicating robust confidence. Ambarella, Inc. also earns mostly “Buy” and “Outperform” grades, but includes some “Neutral” and “Perform” ratings. Investors may interpret Monolithic Power Systems as having slightly stronger institutional endorsement.
Risks specific to each company
In 2026’s complex market environment, these categories reveal critical pressure points and systemic threats facing Monolithic Power Systems, Inc. (MPWR) and Ambarella, Inc. (AMBA):
1. Market & Competition
Monolithic Power Systems, Inc. (MPWR)
- Strong market cap ($58.9B) supports competitive positioning in power electronics.
- Faces pressure from high-beta competition (1.455), with solid product diversification.
Ambarella, Inc. (AMBA)
- Smaller market cap ($2.7B) limits scale against larger semiconductor rivals.
- Higher beta (1.941) signals greater stock sensitivity amid volatile video semiconductor markets.
2. Capital Structure & Debt
Monolithic Power Systems, Inc. (MPWR)
- Zero debt and infinite interest coverage indicate a robust balance sheet and low financial risk.
- Current ratio 5.91 flags possible capital inefficiency despite strong liquidity.
Ambarella, Inc. (AMBA)
- Minimal debt (D/E 0.01) but zero interest coverage warns of potential liquidity stress.
- Current ratio 2.65 suggests adequate liquidity with prudent short-term asset management.
3. Stock Volatility
Monolithic Power Systems, Inc. (MPWR)
- Beta of 1.455 reflects moderate volatility typical for tech growth stocks.
Ambarella, Inc. (AMBA)
- Beta near 1.94 implies elevated price swings, increasing risk in turbulent markets.
4. Regulatory & Legal
Monolithic Power Systems, Inc. (MPWR)
- Operates globally with exposure to semiconductor export controls and IP regulations.
Ambarella, Inc. (AMBA)
- Faces similar regulatory challenges, with additional risks from AI and video surveillance laws.
5. Supply Chain & Operations
Monolithic Power Systems, Inc. (MPWR)
- Broad geographic footprint mitigates supply chain disruptions but adds complexity.
Ambarella, Inc. (AMBA)
- Smaller size heightens vulnerability to chip shortages and supplier concentration risks.
6. ESG & Climate Transition
Monolithic Power Systems, Inc. (MPWR)
- Increasing investor focus on ESG may pressure MPWR to enhance sustainability disclosures.
Ambarella, Inc. (AMBA)
- ESG efforts less visible, potentially raising reputational and compliance risks.
7. Geopolitical Exposure
Monolithic Power Systems, Inc. (MPWR)
- Substantial sales in Asia-Pacific create exposure to US-China trade tensions.
Ambarella, Inc. (AMBA)
- Similar geopolitical risks compounded by reliance on automotive and security sectors.
Which company shows a better risk-adjusted profile?
MPWR’s strongest risk is market valuation—its P/E of 70.7 and P/B of 11.7 suggest stretched investor expectations. AMBA’s largest threat lies in poor profitability and operational losses, with negative ROE (-20.9%) and negative net margin (-41.1%). MPWR boasts a safer Altman Z-Score (63.2 vs. AMBA’s 10.1) and more favorable liquidity metrics despite a high current ratio that may signal capital inefficiency. AMBA’s higher beta and weaker financial scores expose it to greater volatility and distress risk. The data highlight MPWR’s superior balance sheet strength and operational stability, affirming its better risk-adjusted profile in 2026.
Final Verdict: Which stock to choose?
Monolithic Power Systems (MPWR) stands out with its unmatched capital efficiency and resilient cash generation. Its ability to deliver strong returns on invested capital above cost signals a durable competitive advantage. A point of vigilance remains its lofty valuation multiples, which might temper near-term upside. MPWR suits investors targeting aggressive growth with solid fundamentals.
Ambarella (AMBA) leverages a strategic moat rooted in innovative R&D and a specialized product niche. Despite recent profitability challenges, its robust current ratio and lower leverage offer a comparatively safer balance sheet. AMBA fits portfolios seeking growth at a reasonable price, balancing potential turnaround upside with measured risk.
If you prioritize consistent value creation and operational excellence, MPWR is the compelling choice due to its superior ROIC and strong income statement metrics. However, if you seek a speculative growth play with a strategic moat and greater financial stability, AMBA offers better risk management at a discounted valuation. Each scenario demands careful consideration of risk tolerance and investment horizon.
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 Monolithic Power Systems, Inc. and Ambarella, Inc. to enhance your investment decisions:
