Analog Devices Inc. shares dropped in morning trading after reports surfaced that the chipmaker is negotiating an acquisition of Empower Semiconductor for about $1.5 billion in cash. The stock reached an intraday low of $408.01 before recovering to trade around $413.22, marking a notable pullback as investors digested the terms of the proposed deal and awaited an upcoming earnings release.
According to published reports citing people familiar with the discussions, the proposed purchase price would value Empower - a Milpitas, California-based startup focused on integrated voltage regulator and vertical power delivery chips for AI processors and data centers - at approximately 28 times its reported annual revenue of $54 million. That premium has prompted questions from investors about valuation discipline ahead of a key earnings event for Analog Devices.
Analyst reactions diverge
Analyst commentary this week produced mixed signals for ADI. Evercore ISI reiterated an Outperform rating and maintained a $387 price target on Analog Devices on May 19, 2026, citing improving cyclical indicators and price increases on legacy products. By contrast, Cantor Fitzgerald kept an Overweight rating and a substantially higher $510 price target, expressing expectations that ADI's July-quarter revenue and earnings per share guidance will come in above consensus.
The gap between the two price targets highlights differing views on the stock's near-term valuation and contributed to volatility in ADI shares as traders reassessed expectations.
Market backdrop and earnings timing
Broader market weakness compounded pressure on ADI today. Major indexes moved lower, with the S&P 500 off about 0.5%, the Dow Jones down roughly 0.5%, and the NASDAQ declining near 0.7% during the same trading session. Market participants cited geopolitical tensions related to U.S.-Iran relations as a factor dampening risk appetite across technology and semiconductor names.
Analog Devices is scheduled to report fiscal second-quarter 2026 results on May 20. Street expectations ahead of that release stood near $3.5 billion in revenue and $2.88 in adjusted earnings per share, reflecting strong year-over-year growth. The proximity of that earnings announcement appears to have encouraged some investors to trim positions ahead of the print.
Deal uncertainty adds another layer of risk
At the time of the reporting, neither company had officially confirmed the acquisition talks, leaving open the possibility that negotiations could fail to produce a finalized agreement. That unresolved status, coupled with the reported valuation premium for Empower and the differing analyst perspectives, created additional uncertainty for holders of ADI shares in advance of the quarterly results.
Taken together, the proposed high-premium acquisition, conflicting analyst price targets and a risk-off macro environment were the primary drivers behind the intraday pullback in Analog Devices stock.