Analog Devices (ADI) has seen a surge in Wall Street optimism following a strong earnings report, with numerous analysts raising their price targets. The company’s stock is currently reaching unprecedented heights.
In its latest fiscal report, ADI posted adjusted earnings of $2.46 per share on revenues of $3.16 billion for the quarter ending January 31. This performance surpassed analysts’ expectations, who had predicted earnings of $2.31 per share on revenues of $3.12 billion. Year-over-year, earnings soared by 51%, while sales increased by 30%. This marks the fourth consecutive quarter of accelerating sales growth, with earnings growth also continuing to gain momentum.
Looking ahead, Analog Devices forecasts adjusted earnings of $2.88 per share for the current quarter, projecting sales to hit $3.5 billion. This represents a remarkable year-over-year growth of 56% in earnings and 32% in revenue, outperforming Wall Street estimates of $2.46 per share and $3.24 billion in sales.
A significant driver behind this success is the company’s strength in the data center segment. CEO Vincent Roche highlighted that ADI’s analog and mixed-signal chips, alongside products for power management and optical networking, are essential for meeting the rising technical demands of data centers, particularly those incorporating AI technologies.
Analyst Christopher Rolland from Susquehanna describes fiscal 2026 as a “banner year” for the company, citing a robust cyclical upturn and AI-related tailwinds. Rolland reaffirmed his positive outlook for ADI, increasing his price target to $400 from $360.
This optimistic sentiment is echoed across the market, as the stock saw a minor dip to 345.54 despite recently reaching a record high of 355.36. Needham’s analyst, Quinn Bolton, upgraded the stock to “buy,” raising his target to $400 as well. He noted that as operating results improve, it’s no longer viable to remain passive in the stock market.
Bolton highlighted multiple factors fueling continued growth, including strong customer demand in alignment with consumption trends and a consistent rise in sales linked to AI data centers. Additionally, strength in bookings from sectors like automated test equipment, aerospace, and defense further supports an optimistic outlook.
Analog Devices also recently announced an 11% increase in its quarterly dividend to $1.10 per share, marking the 22nd consecutive year of dividend hikes. Since breaking out of a flat base at a buy point of 258.13 in late November, ADI stock has maintained an upward trajectory.
With its robust growth and solid positioning in key markets, Analog Devices is not just a stock to watch but is shaping up as a leader in the semiconductor industry, making it a noteworthy consideration for investors looking for potential in technology sectors.
