Piper Sandler on Thursday raised its price target for Analog Devices Inc. (NASDAQ: ADI) to $360 from $250, while keeping a Neutral rating on the shares. The stock is trading at $346.37, about 2.5% below its 52-week high of $355.36, and carries a price-to-earnings ratio of 61.71, a valuation level that some may consider elevated.
The brokerage pointed to a strong January 2026 quarter and an accompanying guide that exceeded street expectations. Piper Sandler attributed the quarter's upside primarily to demand tied to artificial intelligence and data center applications. Specific areas called out included Automatic Test Equipment and DC Power, where the company saw outsized contribution to growth.
Analog Devices' performance also reflects its position within the Semiconductors & Semiconductor Equipment industry. Over the last twelve months the company reported revenue growth of 16.89%.
Beyond AI and data center strength, the communications business added to the upside, with the optical segment singled out as a notable contributor. By contrast, the automotive business remained weaker, which Piper Sandler linked to earlier over-ordering in previous quarters associated with tariffs and broader macroeconomic uncertainties.
In updating its model, Piper Sandler raised fiscal 2026 estimates to $11.28 in earnings per share on $13.9 billion in revenue, up from a prior forecast of $9.88 on $12.9 billion. For fiscal 2027 the firm boosted estimates to $12.95 on $15.3 billion in revenue, from $11.31 on $14.0 billion previously.
The firm noted that roughly one-third of the company’s 11% sequential guidance for growth is attributable to pricing, with the balance coming from organic demand. Gross margin improvements were driven both by pricing actions and by expansion in higher-margin areas of the business. Analog Devices reported a gross profit margin of 61.47% and maintains solid liquidity metrics, including a current ratio of 2.19.
Other brokerages have also reacted positively to Analog Devices' recent results and guidance. KeyBanc raised its price target to $430 and kept an Overweight rating, citing strength in data center optics and consumer products such as wearables and iPhones. Needham moved to a Buy rating from Hold and set a $400 price target, pointing to improving operating results. Raymond James lifted its target to $385 and highlighted five consecutive quarters of sequential growth. Stifel raised its target to $405, attributing the move to solid results and guidance supported by long-term secular tailwinds across multiple markets. Bernstein adjusted its price target to $375 and kept a Market Perform rating, noting the stock’s relatively high valuation even as estimates are revised upward.
Taken together, these analyst actions indicate a broadly constructive view of Analog Devices' near-term operating momentum and market positioning, particularly in areas tied to AI, data center infrastructure and communications optics. At the same time, some observers point to valuation measures that could temper enthusiasm despite the company's recent operational progress.
Summary
Piper Sandler lifted its price target on Analog Devices to $360 while keeping a Neutral stance after a better-than-expected January quarter and guide. Growth was concentrated in AI and data center end markets, with meaningful contributions from Automatic Test Equipment and DC Power, and further support from optical communications. Piper Sandler raised fiscal 2026 and 2027 estimates and noted pricing accounted for a portion of sequential growth. Multiple other firms raised targets or upgraded ratings, reflecting a generally positive analyst reaction.
Key points
- Piper Sandler raised ADI's price target to $360 from $250 and maintained a Neutral rating.
- Strong January 2026 quarter and guidance beat driven by AI and data center demand, including Automatic Test Equipment and DC Power.
- Several other analysts raised targets or upgraded ratings, emphasizing optics, consumer products and consecutive quarters of growth.
Risks and uncertainties
- Valuation risk: The stock trades at a P/E of 61.71 and sits near its 52-week high, which some analysts view as elevated.
- Automotive demand uncertainty: The automotive business remains subdued following earlier over-ordering tied to tariffs and macro uncertainties, creating potential variability in that end market.
- Pricing reliance: Approximately one-third of the company’s sequential growth guidance is attributed to pricing, making continued margin expansion partially dependent on pricing actions and the sustainability of demand.