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ADI Climbs 35.7% in a Year: Should You Buy, Sell or Hold the Stock?
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Key Takeaways
ADI shares climbed 35.7% in 12 months, outperforming the industry with multi-segment growth.
ADI gained from AI infrastructure demand, lifting data center revenues past $1B.
ADI maintained a high operating margin in fiscal 2025 despite rising costs and intense competition.
Analog Devices (ADI - Free Report) shares have appreciated 35.7% in the trailing 12-month period, driven by positive investors’ sentiments based on ADI’s strong double-digit performance across industrial, automotive, communications and consumer segments. ADI stock outperformed both the Zacks Semiconductor - Analog and Mixed industry and the Zacks Computer and Technology sector’s appreciation of 27.2% and 26.4%, respectively.
Given this strong outperformance and solid segmental growth, investors are left wondering if it is the right time to buy ADI stock. Let’s discuss the fundamentals in detail and uncover the investment opportunity in Analog Devices.
ADI 12-Month Performance Chart
Image Source: Zacks Investment Research
Analog Devices Rides on Expanding AI Footprint
ADI’s industrial and communication segments have been growing on the back of AI-driven infrastructure demand for the past three quarters. ADI’s industrial segment was driven by traction in automatic test equipment systems, which benefited from the demand for AI chips, broadening ADI’s strong position in the System on Chips and memory test markets.
In the communications segment, Analog Devices experienced strong demand for electro-optical interfaces with 800G moving toward 1.6T, precision power management, protection, and monitoring. ADI’s management reported that its data center business surpassed the $1 billion run rate in the fourth quarter of fiscal 2025 on the back of AI infrastructure growth.
ADI’s data center business has been growing by more than 50% year over year for the past three quarters. The company expects AI-driven advancements, including the development of more capable and content-rich humanoid robots, to create significant long-term growth opportunities and further strengthen ADI’s position in the robotics market.
Given these tailwinds, Analog Devices expects revenues of $3.1 billion (+/- $100 million) for the first quarter of fiscal 2026. The Zacks Consensus Estimate for first-quarter fiscal 2026 revenues is pegged at $3.11 billion, indicating year-over-year growth of 28.2%.
ADI Protects Its Margins Amid Rising Competition
As ADI benefits from balanced growth across its industrial, communications, automotive and consumer segments, which increased 14.9%, 26.2%, 15.5% and 16.6%, respectively, in fiscal 2025, the company has also successfully preserved its margins. ADI’s fiscal 2025 non-GAAP operating margin came in at 41.9%, up 20% year over year.
Analog Devices' margins are expanding despite the rise in operating expenditure, capital expenditure and strong competitive pressure from companies, including Texas Instruments (TXN - Free Report) , STMicroelectronics (STM - Free Report) and NXP Semiconductors (NXPI - Free Report) . Texas Instruments competes with ADI in analog, digital and mixed signal chains, precision sensing, and power management for consumer electronics products.
NXP Semiconductor is one of the leading solution providers of analog and mixed-signal chips serving mobile, connectivity, and consumer applications, serving front-end, power management, and mixed signal for consumer devices, especially in mobile and IOT markets. Texas Instruments serves the auto market with its analog sensors, power ICs, in-vehicle networking/signal chain, and driver assistance electronics.
STMicroelectronics competes with ADI with its sensors, such as MEMS and inertial, analog front ends, interface ICs, and microcontrollers. Although intense competition from major players pushed ADI to increase its research & development and sales & marketing spending at double-digit rates, the company’s strong revenue growth has helped protect its margins.
The Zacks Consensus Estimate for first-quarter fiscal 2026 earnings is pegged at $2.28, indicating year-over year growth of 40%. The Zacks Consensus Estimate for first-quarter fiscal 2026 earnings has been revised upward in the past 30 days.
Image Source: Zacks Investment Research
ADI’s 50-Day & 200-Day SMAs Show Bullish Trend
The surge in the stock price has led ADI’s shares to trade above the 50-day and 200-day simple moving averages (SMAs), indicating a bullish trend.
ADI 50-Day and 200-Day SMA Chart
Image Source: Zacks Investment Research
Conclusion: Buy ADI Stock Now
Analog Devices’ strong stock performance reflects accelerating AI-driven growth, broad-based segment strength, and resilient margins despite rising competition. With robust revenue momentum, expanding data center exposure, upward earnings revisions, and a bullish technical setup, ADI remains well-positioned, making this Zacks Rank #1 (Strong Buy) stock an attractive choice for long-term investors. You can see the complete list of today’s Zacks #1 Rank stocks here.
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ADI Climbs 35.7% in a Year: Should You Buy, Sell or Hold the Stock?
Key Takeaways
Analog Devices (ADI - Free Report) shares have appreciated 35.7% in the trailing 12-month period, driven by positive investors’ sentiments based on ADI’s strong double-digit performance across industrial, automotive, communications and consumer segments. ADI stock outperformed both the Zacks Semiconductor - Analog and Mixed industry and the Zacks Computer and Technology sector’s appreciation of 27.2% and 26.4%, respectively.
Given this strong outperformance and solid segmental growth, investors are left wondering if it is the right time to buy ADI stock. Let’s discuss the fundamentals in detail and uncover the investment opportunity in Analog Devices.
ADI 12-Month Performance Chart
Image Source: Zacks Investment Research
Analog Devices Rides on Expanding AI Footprint
ADI’s industrial and communication segments have been growing on the back of AI-driven infrastructure demand for the past three quarters. ADI’s industrial segment was driven by traction in automatic test equipment systems, which benefited from the demand for AI chips, broadening ADI’s strong position in the System on Chips and memory test markets.
In the communications segment, Analog Devices experienced strong demand for electro-optical interfaces with 800G moving toward 1.6T, precision power management, protection, and monitoring. ADI’s management reported that its data center business surpassed the $1 billion run rate in the fourth quarter of fiscal 2025 on the back of AI infrastructure growth.
ADI’s data center business has been growing by more than 50% year over year for the past three quarters. The company expects AI-driven advancements, including the development of more capable and content-rich humanoid robots, to create significant long-term growth opportunities and further strengthen ADI’s position in the robotics market.
Given these tailwinds, Analog Devices expects revenues of $3.1 billion (+/- $100 million) for the first quarter of fiscal 2026. The Zacks Consensus Estimate for first-quarter fiscal 2026 revenues is pegged at $3.11 billion, indicating year-over-year growth of 28.2%.
ADI Protects Its Margins Amid Rising Competition
As ADI benefits from balanced growth across its industrial, communications, automotive and consumer segments, which increased 14.9%, 26.2%, 15.5% and 16.6%, respectively, in fiscal 2025, the company has also successfully preserved its margins. ADI’s fiscal 2025 non-GAAP operating margin came in at 41.9%, up 20% year over year.
Analog Devices' margins are expanding despite the rise in operating expenditure, capital expenditure and strong competitive pressure from companies, including Texas Instruments (TXN - Free Report) , STMicroelectronics (STM - Free Report) and NXP Semiconductors (NXPI - Free Report) . Texas Instruments competes with ADI in analog, digital and mixed signal chains, precision sensing, and power management for consumer electronics products.
NXP Semiconductor is one of the leading solution providers of analog and mixed-signal chips serving mobile, connectivity, and consumer applications, serving front-end, power management, and mixed signal for consumer devices, especially in mobile and IOT markets. Texas Instruments serves the auto market with its analog sensors, power ICs, in-vehicle networking/signal chain, and driver assistance electronics.
STMicroelectronics competes with ADI with its sensors, such as MEMS and inertial, analog front ends, interface ICs, and microcontrollers. Although intense competition from major players pushed ADI to increase its research & development and sales & marketing spending at double-digit rates, the company’s strong revenue growth has helped protect its margins.
The Zacks Consensus Estimate for first-quarter fiscal 2026 earnings is pegged at $2.28, indicating year-over year growth of 40%. The Zacks Consensus Estimate for first-quarter fiscal 2026 earnings has been revised upward in the past 30 days.
Image Source: Zacks Investment Research
ADI’s 50-Day & 200-Day SMAs Show Bullish Trend
The surge in the stock price has led ADI’s shares to trade above the 50-day and 200-day simple moving averages (SMAs), indicating a bullish trend.
ADI 50-Day and 200-Day SMA Chart
Image Source: Zacks Investment Research
Conclusion: Buy ADI Stock Now
Analog Devices’ strong stock performance reflects accelerating AI-driven growth, broad-based segment strength, and resilient margins despite rising competition. With robust revenue momentum, expanding data center exposure, upward earnings revisions, and a bullish technical setup, ADI remains well-positioned, making this Zacks Rank #1 (Strong Buy) stock an attractive choice for long-term investors. You can see the complete list of today’s Zacks #1 Rank stocks here.