ADI · Analog Devices
Conviction · Medium · more likely to lead the S&P 500 over the next three months, by a modest margin
Wrong if: a daily close below $375.72
Note written ·
Price against the kill line
5.9% clear of its kill line on the 13 November 2026 close.
How to read this
The red mark is the price level of the published kill line: a close through it (a weekly close, on a weekly line) would prove the research note wrong on price. The dot is where the stock closed on 13 November 2026; a dot left of the mark has closed through its line.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close below $375.72, on record since 10 November 2026. The shares are up 2.3% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close below $375.72, the 18 September 2026 close, which would erase the mid-September rally and break below the recovery from the November selloff. Fiscal fourth-quarter revenue below the $4.2 billion low end of the 19 August 2026 guide would also break the case.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Technology
Quarter to 1 August 2026, filed 19 August 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 4,022
- Revenue, change on a year (%)
- +39.6
- Gross margin (%)
- 67.3
- Operating margin (%)
- 40.1
- Free cash flow, four quarters ($M)
- 4,938
- Net cash, cash less debt ($M)
- −6,797
- Price to earnings (×)
- 46.6
- Enterprise value to sales (×)
- 14.4
All filed numbers
What Analog Devices reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 4,022 | +39.6 | 67.3 | 40.1 |
| first filed | 3,624 | +37.2 | 67.3 | 38.1 |
| first filed | 3,160 | +30.4 | 64.7 | 31.5 |
| first filed | 3,076 | +25.9 | 63.1 | 30.7 |
| first filed | 2,880 | +24.6 | 62.1 | 28.4 |
| first filed | 2,640 | +22.3 | 61.0 | 25.7 |
| Pre-tax income ($M) | 1,546 |
| Net income ($M) four quarters: 4,135 | 1,340 |
| Diluted shares, change on a year (%) against the quarter to 2 August 2025 | −1.6 |
| Operating cash flow ($M) | 5,545 |
| Capital spending ($M) | 608 |
| Free cash flow ($M) | 4,938 |
| Cash and short-term investments ($M) | 2,325 |
| Debt ($M) non-current long-term debt plus current maturities plus commercial paper | 9,122 |
| Net cash, cash less debt ($M) | −6,797 |
| Deferred revenue ($M) | Not reported |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 2,390 |
| Inventory ($M) | 1,932 |
| Shareholders' equity ($M) | 33,551 |
| Market value ($M) | 192,843 |
| Enterprise value, market value plus net debt ($M) | 199,639 |
| Enterprise value to sales (×) | 14.4 |
| Enterprise value to operating income (×) | 40.5 |
| Price to earnings (×) | 46.6 |
| Price to book value (×) | 5.7 |
| Free-cash-flow yield (%) | 2.6 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 2.1% of shares outstanding sold short, 3.4 days of average trading to cover, +0.9% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $22.3M |
| 12 monthsfrom | $0 | $106.8M |
The thesis
Analog Devices is modestly more likely than not to beat the S&P 500 over the next three months. Its industrial and AI data-center revenue grew 40% from a year earlier in the fiscal third quarter, and the shares have recovered the sector selloff of early November. The fiscal fourth-quarter report on 24 November 2026 decides it: management guided revenue of $4.3 billion plus or minus $100 million on 19 August 2026.
The shares closed at $409.29 on 12 November 2026, up from $361.01 on 5 November 2026, the day of the chip-sector rout. That close sits above both the 50-day and 200-day moving averages. The odds are only modestly better than even. Analog Devices (ADI) still moves with large chip names in broad selloffs, and directors and officers sold steadily through October and November under pre-arranged plans.
The market already prices strong growth. TradingKey reported on 11 November 2026 a trailing annual net profit of $2.27 billion. The shares are 8.2% below their 52-week intraday high, so the price leaves little room for a miss against the $4.3 billion midpoint.
Bullish and bearish views on Analog Devices, Inc.
The bull case on Analog Devices, Inc. (ADI), in brief: growth is broad across end markets. The bear case: sector selling can override company results.
Bull case
- Growth is broad across end markets. The 19 August 2026 results release reported fiscal third-quarter Industrial revenue of $1,972 million, up 53% from a year earlier, and Communications revenue of $655 million, up 84%. Total revenue was $4,022 million, up 40%.
- Guidance sets a higher bar on margin. Management guided the fiscal fourth quarter to an adjusted operating margin of 52.0% plus or minus 100 basis points and adjusted earnings per share of $3.86 plus or minus $0.15 on 19 August 2026. The fiscal third-quarter adjusted operating margin was 50.0%.
- The shares held up in the rout and recovered quickly. Benzinga reported on 5 November 2026 that ADI and Texas Instruments were the only two of the 30 iShares Semiconductor ETF holdings not in a bear market. ADI closed at $409.08 on 11 November 2026, up from $393.30 a session earlier.
- A peer confirmed demand. Texas Instruments reported third-quarter revenue of about $6.06 billion, up 28% from a year earlier, on 21 October 2026 and guided the fourth quarter above analyst estimates (Benzinga).
- Analysts' targets sit above the price. TradingKey reported on 11 November 2026 that analyst price targets over the past month averaged $470.13, with a high of $675 and a low of $315. Baird's $675 target dates from August 2026.
Bear case
- Sector selling can override company results. The iShares Semiconductor ETF fell 12.8% on 5 November 2026, its steepest one-day drop since March 2020 (Benzinga). ADI closed at $361.01 that day.
- Peer guidance points to a flat quarter. Texas Instruments' fourth-quarter revenue midpoint of $6.05 billion is level with its third quarter (Benzinga, 21 October 2026). ADI's $4.3 billion midpoint requires growth from $4,022 million.
- Insiders sold steadily under pre-arranged plans. Chair and Chief Executive Vincent Roche exercised 10,000 options at $108.08 and sold 10,000 shares at $425.46 on 2 November 2026. Director Ray Stata sold 1,416 shares on each of 4 November 2026 and 5 November 2026, and Chief Financial Officer Richard Puccio Jr. sold 1,500 shares on each of 6 October 2026 and 20 October 2026. All of these sales ran under Rule 10b5-1 plans (SEC Form 4 filings).
- A sale outside a plan. Chief Operations and Technology Officer Vivek Jain sold 5,305 shares at an average $407.79 on 7 October 2026 and 8 October 2026. His Form 4 does not mark the sale as made under a Rule 10b5-1 plan.
- Acquisition and debt costs are rising. ADI completed the Alif Semiconductor acquisition on 3 November 2026 for $1.35 billion upfront plus up to $200 million in contingent payments, after issuing $3.0 billion of senior notes (Form 8-K, 17 September 2026). Neither Alif nor Empower Semiconductor has a separately quantified revenue contribution in public disclosure.
- A cycle peak would hit comparisons. Fiscal third-quarter revenue grew 40% from a year earlier and the margin guide is 52.0%. Fiscal 2027 comparisons get harder from here.
Price setup
ADI closed at $409.29 on 12 November 2026. That is above the 50-day moving average of $393.97 and the 200-day moving average of $374.91, both as of 12 November 2026. The three-month price change is 5.4%.
The selloff low was the $361.01 close on 5 November 2026, and the shares recovered above the 50-day average by 11 November 2026. The 200-day average is the nearest long-term reference below the market. The 52-week intraday high is $445.91, set on 22 June 2026. A close above it would put the shares at a new high going into or out of the report.
The report on 24 November 2026 is the main source of company-specific price risk. The CFO's appearance at the UBS conference on 1 December 2026 is the first management commentary after it.
Catalysts ahead
- 24 November 2026: ADI fiscal fourth-quarter 2026 results and first outlook for fiscal 2027. Revenue is tested against the $4.3 billion midpoint and $4.2 billion low end of the guide; the fiscal first-quarter 2027 guide shows whether growth continues after a 40% quarter.
- 1 December 2026: CFO Richard Puccio presents at the UBS Global Technology and AI Conference. The first management commentary after the report, covering demand, margins and the Alif and Empower integrations.
What would change the view
A daily close below $375.72, the 18 September 2026 close, which would erase the mid-September rally and break below the recovery from the November selloff. Fiscal fourth-quarter revenue below the $4.2 billion low end of the 19 August 2026 guide would also break the case.
The risks this note tracks, each with what would confirm it:
- Sector-wide chip selling overwhelms company results, as on 5 November 2026 when the iShares Semiconductor ETF fell 12.8%. Confirmed by: further sessions in which Micron, AMD and other large chip names fall together and ADI closes lower with them.
- The fiscal third quarter's 40% growth and the 52.0% adjusted margin guide mark a cycle peak. Confirmed by: fiscal fourth-quarter revenue at or below $4.2 billion, or a fiscal first-quarter 2027 revenue guide below the fourth-quarter result on 24 November 2026.
- Peer demand pauses, as Texas Instruments guided its fourth-quarter revenue midpoint level with its third quarter. Confirmed by: ADI guiding fiscal first-quarter 2027 revenue below its fiscal fourth-quarter result.
- Acquisition and debt costs rise while neither Alif nor Empower has a quantified revenue contribution. Confirmed by: no revenue or accretion figure for either deal at the 24 November 2026 call, alongside higher interest expense.
- Insider selling broadens beyond pre-arranged plans. Confirmed by: new Form 4 filings showing officer or director sales not made under Rule 10b5-1 plans after the 24 November 2026 report.
- The Cybersecurity matters escalate. Confirmed by: an amended 8-K or the fiscal 2026 Form 10-K quantifying incident costs or customer-notification obligations.
What it trades with
ADI trades with analog peers, and Texas Instruments is the closest read-through. Both held up better than the other 28 iShares Semiconductor ETF holdings on 5 November 2026 (Benzinga). ADI also moves with large chip names on broad recovery days: TradingKey reported that on 11 November 2026, when ADI rose, Micron gained 13.73%, AMD 9.29% and Nvidia 4.60%. Industrial and automotive customers made up 49% and 25% of fiscal third-quarter revenue, so industrial-cycle data matters as much as AI spending.
The evidence, claim by claim (8)
- Fiscal third-quarter 2026 revenue was $4,022 million, up 40% from a year earlier; fourth-quarter guide is $4.3 billion plus or minus $100 million, adjusted operating margin 52.0% plus or minus 100 basis points, adjusted EPS $3.86 plus or minus $0.15. ADI fiscal third-quarter 2026 results release (8-K Exhibit 99.1) · as of
- The iShares Semiconductor ETF fell 12.8% on 5 November 2026, its steepest one-day drop since March 2020; 28 of its 30 holdings were in a bear market, with only Texas Instruments and ADI excepted. Benzinga, 5 November 2026 · as of
- ADI announced that CFO Richard Puccio will present at the UBS Global Technology and AI Conference in Scottsdale on 1 December 2026 at 1:35 p.m. Mountain time. ADI press release, 9 November 2026 · as of
- Chair and CEO Vincent Roche exercised 10,000 options at $108.08 and sold 10,000 shares at $425.46 on 2 November 2026 under a Rule 10b5-1 plan. SEC Form 4 filed 3 November 2026 · as of
- ADI completed its acquisition of Alif Semiconductor, announced as $1.35 billion upfront plus up to $200 million in contingent payments. ADI press release, 3 November 2026 · as of
- Analyst price targets over the past month averaged $470.13, with a high of $675 and a low of $315. TradingKey, 11 November 2026 · as of
- Texas Instruments third-quarter 2026 revenue was about $6.06 billion, up 28% from a year earlier; fourth-quarter guide $5.8–6.3 billion, above analyst estimates. Benzinga, Texas Instruments third-quarter report coverage · as of
- ADI issued $3.0 billion of senior notes due 2029, 2031, 2033 and 2036. ADI Form 8-K, Item 1.01 · as of
Sources
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