Analog Devices, Inc.

Record quarter + strong guidance (high confidence demand) - Q3 FY26 revenue: $4.02B, above the high end of outlook; +11% sequential and +40% YoY. - Profitability/EPS: Gross margin 72.5% (down 50 bps QoQ, up 33 bps YoY). Operating margin ~50% (high end of outlook), +100 bps QoQ and +780 bps YoY. - Adjusted EPS: $3.45 (record), +12% QoQ, +68% YoY. - Q4 outlook (reported non-GAAP): revenue $4.3B ±$100M; operating margin ~52% ±100 bps at midpoint; adjusted EPS $3.86 ±$0.15.

Bull case: “grid-to-chip” AI infrastructure demand driving outsized analog content - CEO argues AI progress is increasingly constrained by power availability, requiring a grid-to-chip system approach (energy monitoring/storage → power delivery → processor power management). - Data center optics (control path): rising complexity moving from 800G to 3.2T; long-term target implies major growth in OCS with management stating OCS revenue poised to ~double in 2026 and similar growth in 2027; adds that CPO is a “SEM expander”. - Data center power: growth tied to higher efficiency, higher power density, and 800V architectures; management cites design-in uplift for protection and 800V intermediate conversion and faster-growing intermediate-to-core conversion. - Empower acquisition strengthens vertical power story; expected benefits include ~10–15% compute power/temperature reduction in 1GW data centers (management frames it as meaningful cost savings).

Segment mix & end-market momentum (what’s actually growing) - Industrial: 49% of revenue, +10% QoQ, +53% YoY (led by ATE, electronic test & measurement, aerospace & defense, automation). - Automotive: 25% of revenue, +14% QoQ, +16% YoY (share/content gains; both ICE and EV exposure). - Communications: 16% of revenue, +18% QoQ, +84% YoY; data center now ~80% of communications, with optical + power >100% YoY; wireless also >25% YoY. - Consumer: 10% of revenue, flat QoQ, +6% YoY, resilient despite memory-driven softness.