Analog Devices Sees Massive Q2 Upside Driven By AI Infrastructure Boom

by

Analog Devices Inc (NASDAQ: ADI) on Wednesday reported upbeat fiscal first-quarter results. Here are the key analyst insights:

  • JPMorgan analyst Harlan Sur maintained an Overweight rating, while raising the price target from $320 to $400.
  • KeyBanc Capital Markets analyst John Vinh reiterated an Overweight rating, while taking the price target higher from $375 to $430.
JPMorgan: Analog Devices released "another solid set of results and guidance," driven by "strong growth in the AI infrastructure-levered Data Center segment" and Wireless momentum, Sur said in a note. Revenues came in at $3.16 billion, up 3% sequentially and 30% year-on-year, topping consensus of $3.12 billion, he added.

Momentum remained strong into the fiscal second quarter, backed by "sustained strong demand in Data Center and Industrial and pricing increases," the analyst wrote. Management guided to revenues of $3.5 billion in the quarter, up 33% year-on-year, significantly above consensus of $3.23 billion and higher than typical seasonal growth, he further stated.

KeyBanc Capital Markets: Analog Devices reported earnings of $2.46 per share, beating consensus of $2.31 per share, driven by higher-than-expected revenues and gross margins, Vinh said. Management guided to fiscal second quarter revenues and earnings of $3.50 billion and $2.88 per share, above consensus estimates of $3.23 billion and $2.46 per share.

Analog Devices benefited from AI-driven strength in Data Center and ATE (automatic test equipment), the analyst stated. "ATE and DC remain growth drivers, while ADI continues to see a broad cyclical recovery, but notes it still has not seen signs of customer restocking," he further wrote.

ADI Price Action: Analog Devices shares were down 1.00% at $342.89 at the time of publication on Thursday, according to Benzinga Pro data.