Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTRicardo PillaiSat, July 18, 2026 at 7:19 PM GMT+2 5 min readIs ADI a good stock to buy? We came across a bullish thesis on Analog Devices, Inc. on Contrarian Indicator's Substack by Cameron Fen. In this article, we will summarize the bulls' thesis on ADI. Analog Devices, Inc.'s share was trading at $375.18 as of July 16th. ADI's trailing and forward P/E were 56.63 and 25.97 respectively according to Yahoo Finance.Allegro MicroSystems (ALGM) Debuts First ASIL-D-Certified PMIC for Braking Systems Portogas D Ace/Shutterstock.comAnalog Devices, Inc. engages in the design, manufacture, testing, and marketing of integrated circuits (ICs), software, and subsystems products in the United States and internationally. Analog Devices is posting record revenue as AI data centers intensify demand for sophisticated power management, but investors must decide whether they are buying the next leg of a structural compute cycle or paying an AI multiple for an analog chipmaker still dependent on industrial restocking and a sluggish automotive market.Read More: 15 AI Stocks That Are Quietly Making Investors RichRead More: Undervalued AI Stock Poised For Massive Gains: 10000% Upside PotentialFiscal second quarter revenue reached $3.62 billion and adjusted diluted EPS rose to $3.09, with industrial and communications revenue increasing 56% and 79%, respectively, while management guided the August quarter to $3.9 billion of revenue, a 49% adjusted operating margin and $3.30 of adjusted EPS. The operating leverage is significant because higher factory utilization and a richer mix of industrial and communications products allow incremental revenue to reach earnings at an attractive rate, while trailing twelve month free cash flow of $4.57 billion gives ADI ample capacity to fund product development and shareholder returns.The completed $1.5 billion cash acquisition of Empower Semiconductor adds a second leg to the thesis by filling a gap between ADI's existing power management portfolio and the processors at the center of AI systems. Empower's silicon capacitors are already in production, while its integrated voltage regulator programs are being developed with hyperscalers and AI chip designers, giving ADI an opportunity to capture more value as rising power density forces data center customers to move power conversion closer to GPUs and other processors.At ADI's July 17 price of $375.29, the supplied consensus target of $447 implies approximately 19% upside, while the $515 bull case offers about 37%; reaching the upper target, however, requires more than another quarter of favorable comparisons because Empower must generate identifiable design wins and management must preserve margins near current levels even as the analog cycle normalizes. The central bearish argument is that the strongest growth categories are recovering from depressed customer inventories rather than establishing a new permanent demand baseline.Terms and Privacy PolicyEU DSA contactPrivacy & Cookie SettingsMore Info