Analog Devices sees double-digit growth into 2027

Analog Devices expects demand across its portfolio to support double-digit growth into fiscal 2027. Speaking with JPMorgan analyst Harlan Sur at the 2026 U.S. All Stars Conference in London, CFO Rich Puccio said the expansion is spreading across almost all end markets and geographic regions, supported by an industrial recovery and momentum in specialized segments.

Aerospace and defense, automated test equipment, and data centers represent roughly 30% of total revenue. Data center revenue is expanding at approximately 100% year over year to an annual run rate of about $2 billion, split evenly between power and optical products. Aerospace and defense exited the fiscal third quarter near a $2 billion annualized run rate, double the roughly $1 billion recorded a year earlier, while automated test equipment is running at about $1 billion annually.

The demand environment remains uneven across product categories. While data centers, aerospace, and test equipment are shipping at or above historical consumption levels, more than half of the company's industrial subsegments remain double digits below their historical trend. Puccio noted that customer inventory replenishment has not yet broadly begun, meaning current deliveries reflect active market demand.

For the fiscal fourth quarter, Analog Devices projects a record gross margin and expects first-quarter performance to beat the typical mid-single-digit sequential seasonal drop. Channel inventory remains slightly below the target of six to seven weeks. Puccio also reaffirmed the company's long-term free-cash-flow margin target of 34% to 40% of revenue, and noted that the pending acquisition of Alif Semiconductor should ramp up more meaningfully around 2028.