Key Highlights

  • Monolithic Power Systems closed as the fourth-best performer in the S&P 500 on Friday and ranked among the Nasdaq-100's top gainers, with no company-specific news found for the day.
  • The September jobs report showed just 29,000 jobs added against roughly 84,000 expected, with the Unemployment rate ticking up and July revised to an outright loss.
  • Monolithic Power makes chips that regulate power for AI accelerators and data-centre boards; each new generation of AI chip draws more power, tying the stock to broader AI infrastructure spending.
  • The rally came with caveats: Treasury yields reversed to close higher, breadth was narrow, and health care was the only sector to fall while storage stocks Seagate and Western Digital sank on a Toshiba capacity report.

Monolithic Power Systems (NASDAQ:MPWR) does not make the headline-grabbing processors that train AI models. It makes the chips that feed them electricity, regulating power so that hungry GPUs and data-centre boards run safely. On Friday, that quiet niche got loud. Shares soared and closed as the fourth-best performer in the S&P 500, and also ranked among the top gainers in the Nasdaq-100. No company-specific news was found for the day. The move was about the market's mood.

Rate Relief Lit the Fuse

The Bureau of Labor Statistics said the US added just 29,000 jobs in September, far below the roughly 84,000 economists expected. July and August were revised lower by a combined 60,000, and the unemployment rate ticked up.

That combination matters because the Federal Reserve, under Chair Kevin Warsh, raised rates on September 16 for the first time since 2023 as oil-driven Inflation picked up during the US-Israel war with Iran. Earlier in the week, markets had treated another hike in October as the most likely outcome. After the jobs data, the odds of an October move collapsed, though they partly recovered by the close.

High-growth chip stocks carry valuations that depend on Earnings far into the future, so cheaper borrowing expectations can lift them quickly. Market commentary grouped Monolithic Power with Microchip Technology, Power Integrations, Impinj and Kulicke and Soffa as chip stocks that soared on the day.

The AI Power Angle

Market commentary tied the move to AI infrastructure investment. One reason investors favour Monolithic Power in that theme: each new generation of AI accelerator draws more power, and every server board needs components to convert and manage it efficiently. When investors grow more confident that data-centre spending will keep growing, power-chip specialists tend to move with the GPU makers.

The broader semiconductor group was strong. Teradyne topped the S&P 500, Arm and Microchip jumped, and Nvidia hit a record high during the session after Morgan Stanley named it its top chip pick. The Nasdaq-100 closed at a record 30,807.93, up 306.37 points, while the Nasdaq Composite hit an intraday all-time high before finishing at 27,190.86.

The Fine Print

Monolithic Power trades at well over a thousand dollars a share, with one estimate putting it near $1,440, so even modest swings translate into large dollar moves.

The rally also came with warning lights. Treasury yields fell after the jobs report, then reversed to close higher, with the 10-year near its highest level since 2002. That Reversal is a reminder that bond markets still worry about inflation. Breadth was narrow, with most S&P 500 stocks still trading below their 50-day moving averages. And health care was the only sector to fall, while storage stocks Seagate and Western Digital sank on a report about Toshiba's capacity expansion.

The Fed Meeting Looms Largest

The Fed's October 27-28 meeting looms largest. Wharton economist Mohamed El-Erian said the jobs report is going to put the Fed definitely on hold for October, but September inflation data and oil prices could still change the calculation.

Third-quarter earnings season starts with PepsiCo on October 8, Delta on October 9 and major banks on October 13 and 14. Analysts expect strong double-digit earnings growth for the S&P 500, having raised estimates during the quarter. For Monolithic Power, any read-through on AI server spending from hardware peers will be the key signal.