Analog Devices Posts Record Q2, CEO Sees Positive Demand Signals Persisting In Q3 – But Investors Want More From Chip Rally

• The industrials segment, which contributed to about half of Analog Devices’ revenue in the quarter, registered a surge of 56% year-on-year.
• The communications segment accounted for 15% of the company’s sales during the quarter and grew 79% during this period.
• Analog Devices credited record demand and operational discipline for results that came in above the top end of its outlook.

Analog Devices Inc. (ADI) reported record second-quarter (Q2) results on Wednesday, blowing past Wall Street expectations.

Analog Devices reported earnings per share of $3.09 on revenue of $3.62 billion during Q2, surpassing Wall Street expectations of an EPS of $2.91 on revenue of $3.52 billion, according to Fiscal.ai data.

Analog Devices shares were up nearly 1% in Wednesday’s pre-market trade, reversing a decline from earlier in the session. ADI was among the top trending tickers on Stocktwits at the time of writing.

ADI Q2 Beat Powered By Industrials, Communications

Analog Devices reported a major surge in its industrials and communications segments during the quarter. The company credited record demand and operational discipline for its results coming in higher than the top-end of its outlook.

The industrials segment, which contributed to about half of Analog Devices’ revenue in the quarter, registered a surge of 56% year-on-year.

The communications segment accounted for 15% of the company’s sales during the quarter and grew 79% during this period.

“Our innovation-led value creation strategy targets our customers’ most complex and consequential challenges with a goal of delivering substantial and sustained business impact,” said Analog Devices CEO Vincent Roche.

ADI Sees Positive Demand Signals In Q3

Analog Devices CFO Richard Puccio stated that the company continued to see growing demand during Q2, registering record bookings in its business-to-business markets of industrial, automotive, and communications segments.

The company added that it sees these positive demand signals to persist in the third quarter (Q3), which is reflected in its earnings and revenue outlook for the quarter.

Analog Devices expects revenue of $3.9 billion in Q3, plus or minus $100 million. It expects EPS of $3.3, plus or minus $0.15. Wall Street expects revenue of $3.63 billion and EPS of $3.01 during the quarter.

ADI To Acquire Empower Semiconductor

Analog Devices announced on late Tuesday that it had agreed to acquire Empower Semiconductor for $1.5 billion in cash, aiming to strengthen its AI power management capabilities as rising compute density increases demand for more efficient power delivery.

The companies said the deal will help enable higher-performance AI systems by bringing power conversion closer to processors, improving efficiency, density and overall system performance.

“DI already delivers some of the highest-performance power management solutions in the industry, and with Empower we are further expanding our portfolio to help customers rearchitect their power systems and achieve the compute densities next-generation AI demands,” Roche said.

How Did Retail Traders React To ADI?

Retail sentiment on Stocktwits around Analog Devices trended in the ‘extremely bullish’ territory, with message volumes at ‘extremely high’ levels at the time of writing.

ADI stock is up 53% year-to-date and 85% over the past 12 months. The S&P 500 ETF (SPY) is up 23% over the past 12 months, while the Invesco QQQ Trust (QQQ) is up 34%.

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