Analog Devices (ADI) Is Up 6.0% After Strong Q4 Results And Higher Capital Returns Is The Bull Case Changing?

• In late November 2025, Analog Devices reported fourth-quarter sales of US$3,076.12 million and net income of US$787.74 million, alongside full-year sales of US$11.02 billion, higher profitability, continued share repurchases, and a US$0.99 quarterly dividend.
• These results, paired with fresh earnings guidance for early fiscal 2026 and ongoing capital returns, highlight how Analog Devices is balancing growth investment with shareholder payouts.
• With this backdrop of stronger earnings and reaffirmed dividends, we’ll now examine how Analog Devices’ latest results influence its investment narrative.

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Analog Devices Investment Narrative Recap

To own Analog Devices, you need to believe its mix of industrial, automotive and communications chips will keep benefiting from automation, electrification and AI-related demand, while margins hold up against lower-cost competitors. The latest results and Q1 2026 guidance support that thesis in the near term, but do not materially change the key short term swing factor: how smoothly demand normalizes across end markets without triggering another inventory correction.

Among the recent announcements, the company’s Q1 fiscal 2026 guidance stands out as most relevant, because it directly addresses near term earnings power and margin resilience after a strong fiscal 2025. The projected US$3.1 billion in revenue at roughly 31% operating margin gives investors a fresher reference point as they weigh both the benefits of secular growth drivers and the risk that higher fixed costs could bite if demand softens.

Yet even with strong guidance, investors should still be aware that rising internal manufacturing and R&D spending could...

Read the full narrative on Analog Devices (it's free!)

Analog Devices' narrative projects $14.3 billion revenue and $4.9 billion earnings by 2028. This requires 11.3% yearly revenue growth and an earnings increase of about $2.9 billion from $2.0 billion today.

Uncover how Analog Devices' forecasts yield a $280.31 fair value, in line with its current price.

Exploring Other Perspectives

Six members of the Simply Wall St Community currently see fair value for Analog Devices between US$162.76 and US$310, underscoring how far opinions can differ. As you weigh those views against ADI’s recent earnings strength and guidance, it is worth examining how much confidence you really have in demand holding up against the risk of another inventory correction and higher fixed costs, before exploring more of these alternative perspectives.

Explore 6 other fair value estimates on Analog Devices - why the stock might be worth 42% less than the current price!

Build Your Own Analog Devices Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Analog Devices research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Analog Devices research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Analog Devices' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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