Published: December 8, 2025
Analog Devices, Inc. (NASDAQ: ADI) is finishing 2025 on a high note. The analog chip specialist has just delivered a stronger‑than‑expected fourth quarter, issued upbeat guidance for early fiscal 2026, and is trading close to fresh 52‑week highs. At the same time, the stock now commands a rich valuation north of 60x trailing earnings, and a growing chorus of analysts and models are warning about limited upside – or even a near‑term pullback. [1]
Here’s a detailed look at where ADI stands today, what the latest news and forecasts say, and how the risk‑reward profile is shaping up as we head into 2026.
1. Analog Devices Stock Today: Price, Performance and Valuation
As of late trading on December 8, 2025, Analog Devices shares change hands at roughly $278, after touching an intraday high around $283.24. That leaves the stock just shy of its 52‑week high near $283 and well above a 52‑week low around $159, giving the company a market capitalization in the neighborhood of $138 billion. [2]
Key snapshot metrics:
- Price: ~$278
- Market cap: ~$137–138 billion
- Trailing P/E: ~61–62x
- PEG ratio: ~1.6
- Beta: ~1.0
- Quick / current ratio: ~1.7 / 2.2
- Debt‑to‑equity: ~0.24
- 50‑day vs. 200‑day moving average: ~$242 vs. ~$238 – with the stock trading well above both, underscoring strong momentum. [3]
On December 5, MarketWatch reported that ADI rose 1.45% to $281.29, notching a new 52‑week closing high, though it underperformed some peers like Broadcom and Texas Instruments on that day. [4]
Technical services are also flagging this outperformance. Investor’s Business Daily recently noted that ADI’s Relative Strength (RS) Rating climbed into the low‑80s, reflecting price performance ahead of most stocks and placing it at the top of the electronics–semiconductor manufacturing group. However, the same report emphasized that the stock is now trading more than 5% above a prior buy point around $258, meaning shares are considered “extended” versus ideal entry levels in that framework. [5]
In short: ADI is strong, liquid, and near its highs – but far from cheap.
2. Q4 2025 and Full‑Year Results: Broad‑Based Strength
The current rally is rooted in genuinely strong fundamentals.
Revenue and earnings
In a November 25, 2025 press release and accompanying earnings call, Analog Devices reported: [6]
- Q4 FY25 revenue:$3.08 billion, with year‑over‑year growth across all end markets, led by communications and industrial.
- Full‑year FY25 revenue:$11.0 billion, up 17% vs. 2024.
- Adjusted Q4 EPS:$2.26, above consensus estimates in the low $2.20s. [7]
- Full‑year adjusted EPS:$7.79, up about 22% year over year. [8]
Reuters and other outlets highlighted that both Q4 revenue and adjusted EPS beat Wall Street forecasts, contributing to a sharp move higher in the stock on the day of the release. [9]
Segment performance
Reuters’ breakdown of Q4 emphasized just how broad the recovery has been: [10]
- Industrial segment (nearly half of sales): revenue of about $1.43 billion, up roughly 34% year over year, driven by spending in factory automation, defense, digital healthcare, and energy infrastructure.
- Communications segment: roughly $390 million, beating expectations and supported by demand from infrastructure and data‑center‑related deployments.
- Other segments, including automotive and consumer, also participated in the upturn, though management has guided to some near‑term softness in automotive heading into early fiscal 2026. [11]
Cash flow and shareholder returns
ADI’s FY25 wasn’t just about top‑line growth. The company also delivered standout cash generation and capital returns: [12]
- Operating cash flow:$4.8 billion (≈44% of revenue).
- Free cash flow:$4.3 billion (≈39% of revenue).
- Capital returns: management returned 96% of free cash flow to shareholders, including $2.2 billion in share repurchases and $1.9 billion in dividends.
- The board declared a quarterly dividend of $0.99 per share, payable December 22, 2025, to shareholders of record on December 8. At today’s price, that equates to a dividend yield of roughly 1.4%. [13]
In other words, ADI is combining double‑digit growth with premium margins and aggressive capital returns – the core of the bull case.
3. Outlook: Management Guides Above the Street for Early FY26
Management’s guidance for the first quarter of fiscal 2026 is another major pillar of the rally.
From the company’s official outlook and Reuters coverage: [14]
- Q1 FY26 revenue guidance:$3.1 billion ± $100 million, above analyst expectations around $2.96–2.97 billion.
- Adjusted EPS guidance:$2.29 ± $0.10, ahead of consensus near $2.16.
- Expected adjusted operating margin near the mid‑40% range at the midpoint.
CFO Richard Puccio stressed that “healthy bookings trends” continued into Q4, with particular strength in Industrial and Communications, even as management acknowledged that macroeconomic uncertainty and tariffs could influence the shape of FY26. [15]
Morgan Stanley’s post‑earnings commentary, cited by InsiderMonkey, noted that ADI’s strength reflects both company‑specific share gains and a cyclical upturn, particularly in markets tied to data centers and AI. [16]
4. Wall Street’s View on December 8, 2025
4.1 Consensus ratings and price targets
Several data providers now show that ADI is widely liked on the Street – but with limited upside at current levels.
- MT Newswires (via analyst data) reports that ADI carries an average rating of “overweight” with a mean price target around $285–286. [17]
- MarketBeat aggregates 33 analyst 12‑month targets with an average around $283.6, a high of $320 and a low of $240. Based on a current price near $278, that implies only about 2% upside to the consensus target. [18]
- GuruFocus’ compilation of 32 Wall Street targets yields an average at roughly $276–277, with a high of $330 and a low near $155, implying slight downside from a recent price near $282. The firm still characterizes the overall recommendation as “Outperform”. [19]
Across these services, the message is consistent: most analysts like the business, but at today’s price they see modest upside at best.
4.2 Fresh calls today: UBS and others
On December 8, 2025, UBS made one of the most notable moves, raising its price target on ADI from $280 to $320 while maintaining a “Buy” rating. The bank cited continued confidence in ADI’s competitive position and growth outlook, particularly after the strong Q4 and guidance. [20]
UBS’ note also recapped a series of other target changes on November 26, including: [21]
- Benchmark: reiterated Buy, target $285.
- BofA Securities: Buy, target raised $275 → $290.
- Evercore ISI: Outperform, target trimmed $303 → $282.
- Morgan Stanley: Overweight, target raised $288 → $293.
- Wells Fargo: Equal‑Weight, target raised $250 → $265.
This flood of post‑earnings updates underscores a broadly bullish institutional stance, even as some firms – like Wells Fargo and various valuation‑focused shops – are more cautious on upside from here.
4.3 Valuation‑focused research: “Ahead of itself?”
Several independent research platforms have flagged valuation risk:
- Simply Wall St, in a piece shared via Sahm Capital, notes that ADI scores only 1 out of 6 on its internal value checks and that the share price is up high‑single to low‑double digits year‑to‑date while still sporting a premium multiple. [22]
- Another Simply Wall St article argues that ADI’s current “Fair Ratio” (a valuation multiple proxy) should be closer to ~31x, compared with a realized multiple around 60x, suggesting that the stock is pricing in more growth and less risk than the fundamentals alone would justify. [23]
Benzinga’s industry comparison gives additional context: ADI’s P/E around 60.8x is high in absolute terms, but actually below the average of over 100x for a peer set that includes high‑growth names like Nvidia, Broadcom and other semiconductor leaders. [24]
So the nuanced picture is:
Relative to the broader semiconductor growth universe, ADI is not the most expensive name – but relative to its own history and traditional analog peers, it trades at a hefty premium.
5. Institutional Flows and Ownership Trends
Articles on Yahoo Finance and other financial outlets have highlighted “huge institutional inflows” into ADI in recent months, pointing to strong demand from large investors following the company’s robust FY25 report. Those pieces reiterate the headline figures – $11 billion in revenue (up 17% year‑on‑year) and EPS of $7.79 (up 22%) – as key catalysts behind professional interest. [25]
At the same time, MarketBeat’s coverage of SVB Wealth LLC trimming its ADI position today shows that some institutions are selectively taking profits with the stock near record highs. That report also reiterates the latest valuation metrics: a share price around $281, market cap of about $137.7 billion, P/E 61.7x, PEG 1.56, and a very solid balance sheet with low leverage and healthy liquidity. [26]
Net‑net, institutional interest remains strong and broadly positive, but some investors are clearly locking in gains after the 2025 run‑up.
6. Quant and AI‑Driven Forecasts: Growing Caution Near Term
Traditional analyst targets are one thing; algorithmic models are another – and they’re notably more cautious right now.
Short‑term technical/AI models
- Intellectia.ai models predict relatively small fluctuations over the next month but lean negative overall: a 1‑day move of about –0.3%, a 1‑week gain of ~2.6%, but a 1‑month decline of roughly –1.5%. Their 2026 projection sits near $241–242 and a 2030 projection in the high‑$260s. On a composite of technicals, moving averages, short‑interest data and seasonal patterns, Intellectia currently labels ADI a “Strong Sell” candidate in the near term. [27]
- CoinCodex’s technical forecast is similarly cautious. As of December 8, the service projects ADI could fall about –8.4% to roughly $257.6 by early January 2026, even though its sentiment indicators are still “bullish” overall and the stock has clocked 18 green days out of the last 30 with about 6.5% volatility. [28]
These tools aren’t crystal balls, but they underline an important point: short‑term risk of a pullback is rising after the sharp post‑earnings run.
Longer‑term fundamental forecasts
On the fundamental side, data aggregator StocksGuide compiles multi‑year estimates that paint an ambitious growth path: [29]
- Revenue estimates: about $11.0B in 2025, rising to $12.5B in 2026, then mid‑single to low‑double‑digit annual growth to roughly $16.9B by 2029.
- EBITDA estimates: from around $3.8B in 2025 to $6.9B in 2026, implying very strong margin expansion, then continuing higher thereafter.
- Net profit estimates: climbing from about $2.3B in 2025 to $4.8B in 2026 and potentially $8.1B by 2029, with net margin projected to improve from roughly 21% to the high‑40% range over time.
Zacks‑sourced analysis, published via Nasdaq, echoes the growth story, forecasting revenue growth of about 15.9% and EPS growth of ~21.5% in fiscal 2025, followed by ~11.8% revenue and ~19.4% EPS growth in the subsequent year. [30]
These projections obviously depend on continued strength in industrial, automotive and AI‑related communications markets, but they explain why many analysts are comfortable maintaining Buy/Overweight ratings even at premium valuations.
7. Strategic Tailwinds: Industrial, Automotive, AI and Manufacturing Capacity
Beyond the raw numbers, several structural tailwinds are supporting the long‑term bull case.
7.1 Industrial and automation
Industrial markets accounted for roughly 45% of revenue in Q3 and nearly half in Q4, with growth spread across instrumentation, factory automation, aerospace and defense, healthcare and energy infrastructure. Management has called out these areas as core beneficiaries of both cyclical recovery and secular digitization, including robotics and “intelligent edge” applications. [31]
7.2 Automotive and mobility
Automotive revenue grew more than 20% year‑over‑year in earlier quarters of FY25 and remains a key pillar, driven by EV power management, advanced driver‑assistance systems (ADAS) and in‑vehicle connectivity. While guidance suggests a near‑term moderation (with auto expected to be down mid‑single digits sequentially in early FY26), the long‑term story is tied to increasing semiconductor content per vehicle. [32]
7.3 Communications, data centers and AI
Communications revenue is benefiting from investment in data‑center and wireline infrastructure associated with AI workloads, with Q3 communications sales up about 18% sequentially and Q4 coming in ahead of expectations. [33]
Morgan Stanley’s Joseph Moore specifically linked ADI’s strength to data‑center and AI trends, noting that this exposure helps offset macro softness elsewhere. [34]
7.4 Manufacturing & CHIPS Act incentives
On the manufacturing side, ADI is making moves to ensure supply‑chain resilience and capital efficiency:
- In January 2025, the Semiconductor Industry Association praised new CHIPS and Science Act incentives earmarked for Analog Devices and Coherent. These incentives support the expansion and modernization of ADI’s R&D and manufacturing sites in Massachusetts, Oregon and Washington, boosting domestic capacity and resilience. [35]
- In October 2025, ADI and ASE Technology announced a strategic collaboration in Penang, Malaysia. ASE plans to acquire ADI’s Penang facility and enter into a long‑term supply agreement, with joint investment aimed at expanding packaging and test capabilities and strengthening ADI’s global footprint – all without ADI shouldering the full capital burden. [36]
Together, these moves position ADI to scale production, diversify geography, and support long‑term growth in a capital‑efficient way.
8. Key Risks: What Could Go Wrong?
No rally is risk‑free. For ADI, investors should keep a close eye on several factors:
- Valuation compression
- Cyclical demand swings
- Industrial and automotive customers are cyclical and sensitive to global growth, capex cycles and interest rates. Management itself has noted that macro uncertainty could shape FY26, and that prior periods have seen prolonged slumps in demand. [39]
- Tariff and trade policy risk
- Reuters highlighted that ADI’s recent strength has come despite tariff concerns, and that future trade restrictions or export controls could raise costs and disrupt demand. [40]
- Execution risk in capacity expansions and partnerships
- The Penang transaction with ASE and CHIPS‑funded U.S. expansions must be executed smoothly to avoid cost overruns, quality issues or delays. [41]
- Competitive and technological risk
- ADI competes with major players – including Texas Instruments, NXP, Onsemi, STMicro and others – many of which are also investing heavily in industrial, automotive and power/analog solutions. [42]
9. So Is ADI a Buy, Hold or Watchlist Stock Now?
Only you can decide whether ADI fits your portfolio and risk tolerance, but the picture as of December 8, 2025 looks something like this:
Bull case in a nutshell
- Strong fundamentals: double‑digit revenue and EPS growth, high margins, robust free cash flow. [43]
- Attractive end‑markets: heavy exposure to industrial, automotive and AI‑related infrastructure, all of which have long growth runways. [44]
- Disciplined capital allocation: high free‑cash‑flow conversion and a consistent commitment to dividends and buybacks. [45]
- Analyst support: majority Buy/Overweight ratings, with some big houses (UBS, BofA, Morgan Stanley, Benchmark) nudging targets higher post‑earnings. [46]
Bear case / caution flags
- Valuation: a P/E above 60x and limited implied upside relative to most 12‑month price targets. [47]
- Short‑term technical risk: algorithmic models and technical services see a higher probability of consolidation or a pullback after the 2025 rally. [48]
- Macro & cycle: industrial and auto orders could slow if global growth stumbles or if rates stay higher for longer. [49]
How different investors might think about it
Growth‑oriented investors who are comfortable paying up for quality may view any dip toward key moving averages as an opportunity to accumulate a premium franchise with durable competitive advantages in conversion and signal‑processing chips.
Valuation‑sensitive or income‑focused investors may prefer to wait for a better entry point, given the lofty multiple and relatively modest dividend yield around 1.4%, despite solid growth. [50]
Existing shareholders might reasonably choose to hold while closely monitoring order trends, margins, and any sign of slowdown in industrial or AI‑related communications demand, using trailing stops or partial profit‑taking in line with their risk management rules.
Whichever camp you fall into, it’s essential to treat this analysis as information, not personal investment advice. Consider your own objectives, time horizon, and tolerance for volatility, and, if needed, consult a qualified financial advisor before making any trading decisions.
References
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