Why Is Analog Devices Stock Going Up

For questions about this article or underlying research, email [email protected].

Analog Devices (ADI) stock returned 73.5% in the year to October 26, 2026, compared with 14.3% for the S&P 500. During that year, each of the company's four quarterly reports showed faster sales growth than the last. News reports said the shares rose after the company beat expectations in November 2025 and February 2026. So how fast is Analog Devices growing now, and where is that growth coming from?

How Fast Is Analog Devices Growing, And Where?

For the quarter ended August 1, fiscal Q3 2026 revenue was $4.02 billion, up 39.6% from a year earlier. Growth had been 24.6% in fiscal Q3 2025, and the pace picked up in every quarter between. Looking ahead, management guided fiscal Q4 2026 revenue to $4.3 billion, plus or minus $100 million.

On the August 19, 2026 call, management said the growth was led by data center and industrial. Accounting for about half of ADI's revenue in the quarter, industrial grew 53% from a year earlier, expanding faster than the company as a whole. The businesses management counts as its AI exposure, the data center business among them, make up 20% of ADI, so most of the company sits outside them.

Analog Devices' Earnings Grew Faster Than Its Stock

Operating margin reached 39.5% in fiscal Q3 2026, climbing from 28.6% in fiscal Q3 2025. Over the twelve months to August 1, 2026, it was 35.7%, the highest at any of the 40 quarter ends starting with fiscal Q4 2016. Diluted earnings per share over those twelve months were $8.43, more than double the $3.92 of a year earlier.

Earnings grew faster than the share price, so the stock costs less per dollar of earnings than it did: 46.6 times at the end of September 2026, down from 62.0 a year earlier. At the October 26 close, the shares traded at 47.9 times earnings, about twice the 22.9 for the S&P 500.

What Has Not Changed At Analog Devices?

Customers have not rebuilt their stocks of ADI's chips and continue to run very lean, management said on the August 19 call. Inventory at distributors rose in fiscal Q3, yet when measured in weeks, it fell below the company's target of 6 to 7 weeks. Outside AI infrastructure and aerospace and defense, management said most of ADI's business still ships well below the levels its customers have historically consumed.

So, by management's account, the growth so far has come without customers restocking. Inventory at ADI's distributors, which management gives in weeks, is the measure to watch when the company reports fiscal Q4 2026 results, expected in November 2026.

How To Act On ADI?

Not necessarily on Analog Devices alone, if your goal is long-term wealth. Wealth is built by owning the companies that keep outperforming, the leaders of their industries, wherever they are. Analog Devices is one. Over the five years to October 2026, its stock rose 147%, ahead of 46 of the 54 other companies in Semiconductors, where the typical company rose 27%.

Finding companies like these takes comparison across industries and sectors, and that is what the Trefis High Quality (HQ) Portfolio does. It holds 30 quality companies in equal weight and, since its inception in September 2020, has returned more than 105%, ahead of a benchmark that combines the S&P 500, S&P Mid-cap and Russell 2000. See how we find the leaders.

Spot an error or want more like this? Tell us in 10 seconds.