Wall Street split as chipmaker MPWR pops, CHPT slides; 2025 S&P 500 targets collide with concentration risk
Traders rotated through tech and consumer names as single-stock stories drove sharp moves, while debate intensifies over how far the S&P 500 can run into 2025 amid rising earnings forecasts but heightened concentration risk.
Stocks to watch: single‑name catalysts set the tone
Chip designer Monolithic Power Systems outperformed as industrial demand accelerated, while EV charging name ChargePoint sank on a fresh Sell rating despite a higher price target. Consumer-exposed Celsius and edtech platform Duolingo gained on strong growth trends and supportive spending data. Media and internet group Ziff Davis fell after multiple target cuts highlighted persistent fundamental uncertainty.
Key Points
- MPWR rose 2.6% on stronger industrial momentum (18.4% growth) and a reiterated Buy call; shares are up 66.3% year-to-date but remain 10.6% below recent highs.
- CHPT dropped 8.9% after an analyst assigned a Sell rating even as the price target increased to $10; the stock is down 57.7% year-to-date, underscoring sector volatility.
- Ziff Davis (ZD) fell 2.8% as analysts cut price targets; shares are 37% lower year-to-date and trading 42% beneath their 52-week peak.
- CELH gained 4.5% on a consumer-spending tailwind; the name has seen 31% swings over the past year and remains 32% off its highs.
- DUOL climbed 3.1% on Buy ratings and strong fundamentals (revenue up 41%, users up 36%), but valuation sensitivity remains elevated.
Macro angle: earnings optimism vs. concentration risk
Some strategists see the S&P 500 stretching toward the 7,700 area by 2025 on projected earnings growth around 15.7%. That bullish path depends on resilient U.S. consumption, margins holding up, and AI-driven capex continuing to deliver productivity gains. The challenge: index leadership remains tightly concentrated in a handful of megacap technology names, amplifying drawdown risk if growth expectations or multiples slip.
For cross-asset traders, this split view matters. A further leg higher for U.S. equities could sustain risk appetite and support U.S. yields, a backdrop that often lends mild support to the dollar versus low-yielding funding currencies. Conversely, any stumble in Big Tech or a valuation reset could flip sentiment quickly, reviving demand for defensive FX such as the Japanese yen and Swiss franc and pressuring high-beta currencies tied to global growth.
Flows and allocation: wealthy investors pivot beyond TDFs
High-net-worth investors are reportedly moving away from target-date funds, with roughly 84% preferring other vehicles. The tilt suggests a desire to diversify beyond traditional stock/bond mixes—seeking outcome-oriented strategies, more tax efficiency, and exposure to real assets or private credit. If sustained, allocation shifts could influence equity multiples at the margin and alter cross-border capital flows that ripple through FX and rates markets.
Stock snapshots
- Monolithic Power Systems (MPWR): Industrial exposure is a bright spot, backing the Buy stance and year-to-date outperformance, though proximity to highs keeps valuation in focus.
- ChargePoint (CHPT): The Sell call underscores execution and cash burn concerns in EV infrastructure, even with a higher target reflecting potential upside from cost cuts or policy support.
- Ziff Davis (ZD): Target reductions reflect uneven digital advertising and subscription trends; investors are demanding clearer catalysts for growth reacceleration.
- Celsius (CELH): Consumer momentum supports revenue visibility, but the stock’s history of wide swings warns of crowded positioning risk.
- Duolingo (DUOL): Strong user and revenue growth continue; valuation sensitivity to rate moves and growth durability remains the key debate.
What it means for traders
Equity leadership remains narrow, leaving the broader market and FX risk proxies exposed to any wobble in megacap tech. Earnings revisions and guidance will be critical into 2025: confirmation of double-digit EPS growth could extend risk-on dynamics, while disappointments would likely favor defensives and safe-haven currencies. Keep an eye on liquidity into year-end and the path of real yields—two variables that can swing growth valuations and the dollar in short order.
What to watch next
- Updates to 2025 S&P 500 EPS forecasts and breadth indicators.
- Liquidity conditions and equity-volatility signals feeding into FX carry strategies.
- Capital expenditure guidance across semis and AI infrastructure.
- Consumer spending data for confirmation of momentum underpinning CELH and other discretionary names.
- Funding needs and cash burn trajectories in EV infrastructure plays like CHPT.
FAQ
Why did Monolithic Power Systems (MPWR) rally?
MPWR gained on evidence of 18.4% industrial growth and supportive analyst commentary, reinforcing confidence in its end-market exposure and earnings trajectory despite a premium valuation.
Is ChargePoint’s (CHPT) selloff a sector-wide warning for clean energy?
Not necessarily, but it highlights execution and financing risks in capital-intensive EV infrastructure. Stock-specific factors can diverge from broader clean-energy sentiment.
What would an S&P 500 run toward 7,700 imply for FX markets?
A bullish U.S. equity backdrop tends to support risk appetite and can underpin the dollar via higher real yields. However, if the rally is narrowly concentrated, any reversal could quickly favor the yen and Swiss franc.
How does concentration risk affect portfolios?
Heavy reliance on a few megacap names raises drawdown risk. Diversifying across factors, sectors, and regions can reduce volatility and tail risk.
Why are wealthy investors moving away from target-date funds?
They’re seeking more customized allocations with better tax efficiency and exposure to alternative assets. That shift could influence equity demand and cross-asset correlations over time.
Reporting by BPayNews.
