Analog Devices, Inc. (ADI) has reported a 50% year-over-year growth in its data center business for fiscal 2025, driven by increased investments in AI infrastructure. The growth trajectory is expected to continue into fiscal 2026, bolstered by higher demands for processing speeds, power density, and data movement. ADI estimates that its combined automated test equipment (ATE) and data center opportunity could reach over $2 billion in run rate, contributing approximately 20% to its revenues with sustained double-digit growth.
ADI’s data center products include hot-swap and protection solutions, which represent one-third of its data center power revenues. The shift toward higher-voltage architectures, primarily 48V and 54V, is expanding its market share, while advancements in optical connectivity further enhance performance. In contrast, competitors such as Broadcom and Advanced Micro Devices (AMD) are also adapting to the growing AI-driven data center landscape with their custom silicon solutions.
ADI shares have increased by 58.3% in the past year, outpacing the Semiconductor – Analog and Mixed industry growth of 49.4%. The company’s forward price-to-sales ratio stands at 12.31, higher than the industry average of 9.34, with Zacks Consensus Estimates predicting earnings growth of 42.49% for fiscal 2026 and 11.16% for fiscal 2027.
