Monolithic Power Systems, Inc.

The Monolithic Power Systems class action lawsuit alleges that defendants throughout the class period made false and/or misleading statements and/or failed to disclose that: (i) Monolithic Power Systems' voltage regulator modules and power management integrated circuits were suffering from significant performance and quality control issues; (ii) these defects had, in turn, negatively impacted the performance of certain products offered by Nvidia in which such products were used; (iii) Monolithic Power Systems had failed to adequately address and resolve known issues affecting the performance of the power management solutions Monolithic Power Systems supplied to Nvidia; (iv) Monolithic Power Systems' relationship with Nvidia had been irreparably damaged due to the significant performance and quality control problems affecting the products it supplied to Nvidia and Monolithic Power Systems' failure to adequately address such issues; and (v) as a result of the above, Monolithic Power Systems was acutely exposed to material undisclosed risks of significant business, financial, and reputational harm. On October 30, 2024, Monolithic Power Systems announced financial results for its fiscal quarter ending September 30, 2024, revealing a sudden and surprising slowdown in Monolithic Power Systems' critical Enterprise Data segment. Specifically, Monolithic Power Systems reported that quarterly revenue within Monolithic Power Systems' Enterprise Data business declined sequentially to $184 million, down from $187 million in the prior quarter, missing consensus estimates of $211 million by nearly 13%. On this news, the price of Monolithic Power Systems common stock fell more than 17%. Then, on November 11, 2024, Edgewater Research analysts published a report revealing that Nvidia had cancelled half of its outstanding Monolithic Power Systems orders and intended to eliminate Monolithic Power Systems' allocation to most variants of its next-generation Blackwell chips due to "[p]erformance issues" with Monolithic Power Systems' products. The report further disclosed that Nvidia engineers had "lost confidence" in Monolithic Power Systems' products and decided to turn to Monolithic Power Systems' competitors as Nvidias "primary suppliers." On this news, the price of Monolithic Power Systems common stock fell nearly 15%.

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