Key Stats — Analog Devices (ADI)
- Current Price: ~$398 (May 20, 2026)
- Q2 FY2026 Revenue: $3.62B, up 37% YoY and 15% QoQ
- Q2 FY2026 Adjusted EPS: $3.09, up 67% YoY
- Q3 FY2026 Revenue Guidance: $3.9B (midpoint), plus or minus $100M
- Q3 FY2026 Adjusted EPS Guidance: $3.30 (midpoint), plus or minus $0.15
- TIKR Model Price Target: $601
- Implied Upside: ~51%
Analog Devices Posts Record Revenue of $3.62B as Industrial and Data Center Break Out
Analog Devices (ADI) posted record quarterly revenue of $3.62B in its fiscal second quarter, up 37% year-over-year and finishing above the high end of management’s guidance.
Adjusted EPS reached a record $3.09, up 67% year-over-year and ahead of the high end of the outlook range, according to CFO Richard Puccio on the Q2 FY2026 earnings call.
Industrial, which represented 50% of Q2 revenue, was the primary growth engine, rising 20% sequentially and 56% year-over-year.
All industrial sub-segments grew sequentially and year-over-year, with aerospace and defense, ATE, electronic test and measurement, and the broad market leading the way, according to Puccio.
Communications represented 15% of revenue and rose 22% sequentially and 79% year-over-year.
Data center, which now accounts for more than 75% of communications revenue, was up more than 90% year-over-year, driven by both optical and power portfolios, according to Puccio.
Automotive represented 24% of revenue, finishing up 8% sequentially and 2% year-over-year, with BMS revenue growing double digits year-over-year for the first time in two years, according to Puccio.
Consumer represented 11% of quarterly revenue, flat sequentially and up 23% year-over-year.
Q2 operating margin came in at 49%, up 350 basis points sequentially and 780 basis points year-over-year, according to Puccio.
Gross margin for the quarter was 73%, up 180 basis points sequentially and 360 basis points year-over-year, driven by favorable mix, higher utilization, and pricing, according to Puccio.
For Q3 FY2026, management guided revenue to $3.9B (midpoint) and adjusted EPS to $3.30 (midpoint), with operating margin expected at 49% plus or minus 100 basis points, according to Puccio.
ADI also announced a planned acquisition of Empower Semiconductor, targeting Empower’s integrated voltage regulator and silicon capacitor technology for deployment in AI accelerator platforms, according to CEO Vincent Roche.
Over the trailing 12 months, ADI returned $5B to shareholders through dividends and share repurchases, according to Puccio.
ADI Operating Margin Expands to 49% as the Full Recovery Cycle Plays Out
The income statement shows a company that has moved from contraction to broad-based acceleration, with every key margin metric now sitting well above the trough levels of the prior year.
Revenue troughed at $2.16B in the May 2024 quarter before recovering steadily: $2.31B, $2.44B, then a modest dip to $2.42B before re-accelerating through $2.64B, $2.88B, $3.08B, and now $3.16B at January 2026 and $3.62B at the April 2026 quarter reported this week.
Gross margin followed the same arc, recovering from 55% in mid-2024 to 61% by May 2025, 63% by November 2025, and 65% by January 2026.
Puccio noted on the earnings call that Q2 gross margin of 73% came in slightly above internal expectations due to better-than-anticipated mix and utilization, and that Q3 will see approximately a 50-basis-point sequential decline due to the absence of a one-time channel repricing benefit from Q2.
Operating income expanded sharply across the recovery, rising from $390M in May 2024 to $500M, $570M, $560M, $680M, $820M, $940M, and $1.05B through January 2026, with operating margin expanding from 18% to 33% over that span.
At 49% non-GAAP operating margin in Q2 FY2026, the company has reached what management described as a near-term ceiling given current factory utilization levels, according to Puccio.
TIKR’s $601 Target for Analog Devices Stock: What Has to Hold Through FY2027
The TIKR model assigns Analog Devices stock a mid-case price target of ~$601, representing roughly 51% upside from the current price of ~$398, to be realized over approximately 4.4 years.
The mid case assumes a revenue CAGR of 9.6% and a net income margin of 38.5%, with EPS growth compounding at 11.4% annually through the forecast period.
The model embeds a P/E multiple compression of 2.0% per year in the mid case, meaning the target is reached despite the stock becoming cheaper on a multiple basis, which sets a high bar for the earnings growth to carry the return.
The record Q2 print and step-up Q3 guide reinforce the near-term earnings trajectory, but the 51% upside case depends on ADI sustaining growth well into FY27 and beyond, across both the cyclical industrial recovery and the secular AI infrastructure buildout.
At the current price, Analog Devices stock appears to price in strong near-term execution without fully crediting the multi-year compounding embedded in the TIKR model’s mid-case assumptions.
The core tension for Analog Devices stock is whether the industrial recovery and data center surge are the beginning of a durable multi-year compounding cycle or a cyclical surge that front-loads returns while leaving the stock exposed once growth normalizes.
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