Can ADI's Automotive Segment Sustain Its Growth Momentum?

Analog Devices' automotive growth outpaces the vehicle market, with gains in ADAS, infotainment and electric powertrains driving momentum into the fourth quarter.

Subham Roy

2 min read

Analog Devices’ ADI automotive business delivered strong growth in the third quarter of fiscal 2026. Automotive accounted for 25% of ADI’s quarterly revenues and increased 14% sequentially and 16% year over year. This was a meaningful contribution to the company’s broad-based growth, as ADI reported total quarterly revenues of $4.02 billion.

The growth in automotive was stronger than the underlying vehicle market. ADI said its higher content and share positions globally continued to drive growth well above the seasonally adjusted annual rate of vehicle sales. This suggests that ADI is benefiting not only from higher vehicle production but also from increasing semiconductor content per vehicle.

One important growth area is next-generation advanced driver-assistance systems (ADAS). As vehicles become more intelligent, they require more sensing, signal processing, power management and other semiconductor content. ADI specifically highlighted next-generation ADAS and infotainment systems as areas where it is seeing strength across customers and products, and it is winning more business.

Electric powertrains are another important opportunity for the automotive business. ADI reported diversified strength in electric powertrains, alongside ADAS and infotainment. The company also said it is gaining share across different types of vehicles, including both combustion-engine vehicles and electric vehicles. This gives the automotive business exposure to the broader shift toward greater electronic content in vehicles rather than relying on a single vehicle technology.

Looking ahead, ADI expects automotive revenues to increase at a low-single-digit rate in the fourth quarter. Although this is slower than the 16% year-over-year growth achieved in the third quarter, the company continues to see opportunities across infotainment, electrification, autonomous, ADAS and safety applications.

How Competitors Fare Against Analog Devices

Analog Devices competes with Texas Instruments TXN and STMicroelectronics STM in the Automotive segment. Texas Instruments competes with ADI in Analog sensors, power ICs, in-vehicle networking and driver assistance electronics.

In the second quarter of 2026, Texas Instruments’ automotive sales rose by the mid-teens on a year-over-year basis. STMicroelectronics competes in sensors like MEMS and inertial, analog front ends, interface ICs and microcontrollers. Both Texas Instruments and STMicroelectronics compete with ADI across the broader Industrial and communication segment.

ADI’s Price Performance, Valuation and Estimates

Shares of ADI have gained 36.9% year to date compared with the Semiconductor - Analog and Mixed industry’s growth of 32%.

ADI YTD Performance ChartPerformance

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From a valuation standpoint, ADI trades at a forward price-to-sales ratio of 10.15X, higher than the industry’s average of 7.83X.

ADI Forward 12-Month (P/S) Valuation Chart

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The Zacks Consensus Estimate for ADI’s fiscal 2026 earnings implies year-over-year growth of 66.4%. The consensus estimate for fiscal 2026 has been revised upward by 44 cents in the past seven days.

Image Source: Zacks Investment Research

ADI currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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