Key Takeaways for ADI Stock as of August 2026
- Record Quarter: ADI topped $4 billion in revenue for the first time.
- Guidance Raised: Management guided Q4 revenue to $4.3B and adjusted EPS to $3.86, with gross margin expected near 74%.
- Data Center Surge: Communications revenue grew 84% YoY as data center, now 80% of the segment, delivered more than 100% YoY growth in both optical and power.
- AI TAM Doubles: CEO Vincent Roche said ADI’s 2030 data center and energy addressable market has “more than doubled” from what the company projected just a year ago.
ADI just logged its first-ever $4 billion quarter while doubling its own 2030 AI TAM outlook. Explore the numbers on TIKR for free →
ADI’s First $4 Billion Quarter Confirms an AI Power Franchise
Analog Devices (ADI) closed its fiscal third quarter on August 19, 2026 with revenue of $4.02 billion, the first time in company history that quarterly sales cleared the $4 billion mark. That figure beat the Street’s $3.93 billion estimate by 2.36% and represented 40% growth year over year, with every end market contributing.
Industrial, still ADI stock’s largest revenue driver at 49% of the mix, rose 53% year over year on strength in automated test equipment, aerospace and defense, and factory automation. Automotive, at 25% of sales, grew 16% year over year as the company’s content gains in advanced driver assistance and electric powertrains outpaced broader vehicle production. But the fastest mover sat inside communications, which climbed 84% year over year to reach 16% of total revenue.
Data center now makes up 80% of that communications book, and both the optical and power businesses inside it grew more than 100% year over year. CEO Vincent Roche framed the scale of that opportunity on the Q3 earnings call: “Our current assessment is that our 2030 data center and energy SAM has more than doubled from what we had envisioned just 1 year ago.” That reassessment did not come from AI capital spending alone, he said, but from new architectures such as 800-volt DC power distribution and co-packaged optics that pull far more analog content into every rack.
Margins backed up the growth story. Adjusted EPS hit a record $3.45, up 68% year over year and 3.32% above the $3.34 Street estimate, while EBIT margin beat consensus by 93 basis points to reach 49.97%. Gross margin came in at 72.5%, and CFO Richard Puccio guided the next quarter to roughly 74%, a level the company has not held since 2022. Free cash flow over the trailing twelve months reached $4.9 billion, or 36% of revenue, even as quarterly free cash flow of $1.458 billion missed the Street’s $1.538 billion estimate by 5.17% on higher capital spending.
That capital spending traces partly to the Empower Semiconductor acquisition, a $1.5 billion all-cash deal that closed July 7 and pushed net leverage to 0.9 times. The purchase extends ADI’s power management reach directly into the processor package. For the fourth quarter, management guided revenue to $4.3 billion and adjusted EPS to $3.86, both pointing to continued double-digit growth heading into fiscal 2027.
ADI’s own guide points to a 74% gross margin next quarter, a level last seen at the 2022 peak. Track ADI’s margin trend on TIKR for free →
TIKR Values ADI Stock at $655, Pricing In Sustained AI-Driven Growth
TIKR’s mid-case model values ADI stock at $655 by October 2030, implying a 75% total return from the current price of $373, or 14% annualized over 4.2 years.
That return profile puts ADI stock among the more richly priced names in the semiconductor group, a premium the model justifies through the company’s expanding role across AI power and optical infrastructure rather than through multiple expansion alone.
The target rests on the same dynamics that drove the July quarter: a data center business compounding above 100% year over year, an 800-volt power transition pulling more analog content into every AI rack, and a 74% gross margin that management now treats as a sustainable base rather than a cyclical peak. With ADI’s own assessment of its 2030 data center and energy addressable market now doubled, the growth runway behind the target looks less like a forecast and more like a floor.
TIKR’s model puts ADI stock on a path to $655 and a 75% total return by 2030. Check the full valuation model on TIKR for free →
Should You Invest in Analog Devices, Inc.?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
