Start here if you're new
what it is
ADI makes chips that turn real-world signals like heat, motion, and power into data machines can actually use.
how it gets paid
FY2025 (ended Nov. 1, 2025) revenue was about $11.0B, up roughly 17% vs. FY2024 on a reported basis.
why it's growing
Growth was broad-based: industrial, communications, and data-center end markets all contributed, with data center called out for strength tied to AI-related infrastructure demand (per company commentary).
what just happened
A recent quarter printed about $3.16B revenue (~30% vs. prior-year quarter) with diluted EPS around $2.26 — check the latest release for the exact fiscal period label.
At a glance
A balance sheet — strong enough to weather a downturn
65/100 earnings predictability — reasonably predictable
41.0x trailing p/e — you're paying up for this one
1.4% dividend yield — cash in your pocket every quarter
15.5% return on capital — nothing to write home about
xvary composite: 68/100 — average
What they do
ADI makes chips that turn real-world signals like heat, motion, and power into data machines can actually use.
ADI sells the parts you do not casually swap out. It spends 16% of sales on R&D, and still posted a 64.7% gross margin (gross margin → money left after making the chip → pricing power). Once your factory system or vehicle platform is built around these chips, changing suppliers is slow, risky, and expensive.
How they make money
$11.0B
annual revenue · their business grew +16.9% last year
total revenue
$11.0B
+17%
The products that matter
largest end-market exposure
Industrial
47% of top line · +38%
Industrial accounted for 47% of top line and grew 38% from the previous year. If you want to know whether the recovery has real weight behind it, start here.
center of gravity
networking and connectivity demand
Communications
+63% growth
Communications grew 63% from the previous year. Great number. Also the kind of number semis rarely repeat forever, which is why the next two quarters matter more than the headline.
recovery driver
ai power and optical exposure
Data center
+50% growth
Data center demand grew 50% from the previous year, helped by AI server deployments, power delivery, and optical network upgrades. You get exposure to the hottest part of chips without owning a pure AI narrative.
catalyst watch
Key numbers
~21%
GAAP net margin (FY2025)
GAAP net income on ~$11.0B revenue implies roughly 20–21% net margin for FY2025 — strong for analog semis, but not a 50% print.
41.0x
trailing p/e
P/E → stock price divided by past earnings → so what: you are paying a premium price for growth that still has to show up.
$7.2B
long-term debt
Long-term debt → money owed over years → so what: it is only 4% of capital, which keeps the balance sheet from becoming the story.
70%
foreign sales
Foreign sales → revenue from outside the U.S. → so what: ADI is global, but so are its trade and currency headaches.
Financial health
A
strength
- balance sheet grade A — very strong financial position
- risk rank 3 — safer than 50% of stocks
- price stability 70 / 100
- long-term debt $7.2B (4% of capital)
- net profit margin (GAAP) ~21% — keeps about 21 cents of every dollar in revenue (FY2025)
- return on equity 17% — $0.17 profit for every $1 investors have put in
A — among the top-rated companies for balance sheet quality.
Total return vs. market
You invested $10,000 in ADI 3 years ago → it's now worth $18,330.
The index would have given you $14,540.
source: institutional data · total return
What just happened
missed estimates
Quarterly revenue hit $3.2B, up 30% vs. prior year, even as EPS came in a penny light versus estimates.
The quarter was driven by a record data center performance and a 38% jump in industrial. Data center demand itself grew 50% vs. prior year, which is the kind of number that explains why investors keep paying up.
$3.2B
revenue
$2.26
eps
64.7%
gross margin
the number that mattered
The 30% revenue jump mattered most because it shows ADI is getting broad demand back, not just squeezing more profit from a weak base.
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analog devices started out fiscal 2026 on solid footing.
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the company’s results were fueled by a 30% vs. prior year surge in revenues to $3.16 billion, driven by record data center, industrial, and communications demand.key drivers included ai-driven power management, along with broad-based recovery in most of analog’s end markets.
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digging deeper, data center demand benefited from accelerated growth (up 50% from a year ago) with continued strength driven by ai server deployments, power delivery, and optical network upgrades.
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furthermore, the industrial segment, which accounts for 47% of the top line, advanced 38% from the previous year, while communications catapulted a whopping 63%.
-
we anticipate that the positive momentum will continue through fiscal 2027.we believe that the story will largely remain the same over the 12 to 18 months ahead, as analog is well positioned to benefit from continued strength in some of the more high-flying segments in the chip market. there are some geopolitical concerns, namely the conflict in the middle east, that may put pressure on the global economy.
snap-source: Analog Devices Q4/FY2025 results — investor.analog.com · Form 10-K (FY2025)
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What could go wrong
the #1 risk is the industrial and communications rebound fading before the valuation does.
med
recovery stalls in the biggest markets
Industrial is 47% of top line and grew 38%, while communications grew 63%. Those are excellent numbers. They also create a high bar for the next few quarters.
If those growth rates fade quickly, the $3.5B Q2 hurdle and the $14B fiscal 2026 revenue expectation both get harder to defend.
med
the multiple stops being generous
At 41.0x trailing earnings, ADI is not priced like an average cyclical semiconductor stock. You are paying up for quality, resilience, and a rebound that keeps going.
That means the damage can come from valuation compression even if the business stays good. Same company. Lower multiple. Lower stock.
med
the segment picture is thinner than ideal
This page gives clear signals from industrial, communications, and data center, plus references to other end markets. What it does not give you is a fully reconciled segment map across the whole $11.0B base.
That limits precision. You can see the direction of the recovery, but not every moving part behind it.
A premium multiple is sitting on top of a recovery story. If a 47%-of-revenue industrial segment slows and ADI cannot keep margins near 71.2% gross and 41.8% net, 41.0x trailing earnings gets much harder to justify.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
industrial growth rate
Industrial is 47% of top line and just grew 38%. That is the most important operating number on the page.
calendar
Q2 revenue versus the $3.5B guide
Management called $3.5B a new high watermark. Hit it, and the recovery case strengthens. Miss it, and the valuation conversation changes fast.
risk
gross margin around 71.2%
Gross margin tells you whether ADI still has pricing power and mix quality. That matters more than a headline revenue beat.
trend
communications and data center follow-through
+63% and +50% growth grab attention. The next question is whether they remain growth drivers or just gave you the pop off the trough.
Analyst rankings
short-term outlook
average
Momentum score 3. In human-speak: analysts see a decent setup, but not a major near-term edge.
risk profile
average
Stability score 3. You are not buying a bunker stock, but this is also not the kind of balance sheet story that keeps people up at night.
chart momentum
average
Technical score 3. The chart is acting like the market, not sending you some secret message.
earnings predictability
65 / 100
Good, not spotless. Expect a steadier business than many chip names, but not one that never surprises.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 767 buyers vs. 667 sellers in 4q2025. total institutional holdings: 0.4B shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$244
$472
$320
current price
$358
target midpoint · +12% from current · 3-5yr high: $570 (+80% · 17% ann'l return)
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