About ANALOG DEVICES INC
Analog Devices, Inc. designs, manufactures, tests, and markets integrated circuits (ICs), software, and subsystems that leverage analog, mixed-signal, and digital signal processing technologies. The company provides data converter products, which translate real-world analog signals into digital data, as well as translates digital data into analog signals; power management and reference products for power conversion, driver monitoring, sequencing, and energy management applications in the automotive, communications, industrial, and high-end consumer markets; and power ICs include performance, integration, and software design simulation tools for accurate power supply designs. It also offers high-performance amplifiers to condition analog signals; and radio frequency and microwave ICs to support cellular infrastructure; and microelectromechanical systems technology solutions, including accelerometers used to sense acceleration, gyroscopes for sense rotation, inertial measurement units to sense multiple degrees of freedom, and broadband switches for radio and instrument systems, as well as isolators.
In addition, the company offers digital signal processing and system products for high-speed numeric calculations. It serves clients in the industrial, automotive, consumer, instrumentation, aerospace, and communications markets through a direct sales force, third-party distributors, and independent sales representatives in the United States, the rest of North and South America, Europe, Japan, China, and rest of Asia, as well as through its Website. Analog Devices, Inc. was incorporated in 1965 and is headquartered in Wilmington, Massachusetts.
ADI operates in the Manufacturing | Electronic Equipment | headquartered in Norwood, Massachusetts | approximately 24,400 employees | led by CEO Vincent T. Roche.
The $115.2B question: What happens when a company this good becomes this expensive?
In the rarefied air of Silicon Valley valuations, ANALOG DEVICES INC sits at a peculiar crossroads. The company that once defined an era now finds itself redefining another — and investors are paying a premium for the privilege of coming along.
At $115.2B in market capitalization, ANALOG DEVICES INC (ADI) currently ranks #237 in our quantitative model, with a composite score of 75.8/100. That places it firmly in "Strong Buy" territory — our highest conviction rating.
But here's the thing about stocks priced for perfection: They leave no room for error.
The Numbers That Matter
Let's start with what's undeniably true. Our 6-factor model gives ADI the following scores:
| Factor | Score | Weight | Assessment |
|---|---|---|---|
| Quality | 67/100 | 30% | Strong |
| Value | 92/100 | 15% | Attractive |
| Momentum | 60/100 | 25% | Steady |
| Investment | 32/100 | 10% | Low |
| Stability | 78/100 | 10% | Solid |
| Short Interest | 57/100 | 10% | Normal |
The quality score of 67/100 is the headline here. It reflects profitability metrics that would make most CFOs weep with envy:
- ROE: 6.6%
- Net Margin: 20.6%
- Gross Margin: 61.5%
These aren't just good numbers. They're the kind of numbers that make ADI a "must-own" stock for institutional portfolios.
The Bull Case
"If you could design a business in a laboratory, it would look something like ADI."
The bull case writes itself:
- Quality is persistent. Academic research shows high-quality stocks outperform by 4-6% annually over long periods. ADI is quality defined.
- Momentum is real. With a momentum score of 60/100, the stock has been recognized by the market — and momentum tends to persist.
- The moat is deep. Companies with these margins don't lose them easily. The competitive position is entrenched.
The Bear Case
But here's what keeps value investors up at night:
- Valuation compression risk. At current levels, the stock is priced for continued perfection. Any stumble — a missed quarter, a competitive threat, a macro slowdown — could compress the multiple from 50.8x to the low 20s. That's a 20-30% decline without anything fundamentally "wrong."
- The crowded trade problem. When everyone owns a stock, who's left to buy? Momentum works until it doesn't.
- Mean reversion. Trees don't grow to the sky. At some point, growth decelerates.
The Valuation Framework
| Scenario | Assumption | Fair Value | Upside/Downside |
|---|---|---|---|
| Bear | Multiple compression to 20x | -20% | Downside |
| Base | Current trajectory continues | +10-15% | Modest upside |
| Bull | Momentum accelerates | +30-40% | Significant upside |
The risk-reward is ... fine. Not exceptional. Not terrible. Just fine.
The Bottom Line
ANALOG DEVICES INC is exactly what it appears to be: a high-quality business with strong momentum trading at a premium price. Whether that's attractive depends entirely on what kind of investor you are.
For long-term, buy-and-hold investors, ADI is a core holding. For value investors or short-term traders, look elsewhere.
The company is priced for perfection — and in markets, as in life, perfection is a fragile thing.
⭐⭐⭐⭐⭐ Rating: 5-Star Strong Buy
Score: 75.8/100 | Rank: #237 of 3,571 stocks
Sector: Technology
This analysis reflects the views of Blank Capital Research as of February 16, 2026. It is not investment advice. Past performance does not guarantee future results.