Analog Devices, Inc.

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Bullish +72

STM vs. ADI: Which Semiconductor Stock Looks More Attractive Now?

AI-generated analysis

📊 Both STMicroelectronics (STM) and Analog Devices (ADI) are positioned to benefit from AI, industrial automation, and electrification trends.

🚀 STMicroelectronics expects double-digit revenue growth in 2026 with data center revenues projected to exceed $500 million this year and surpass $1 billion in 2027.

🤝 STM has secured a multiyear commercial engagement with Amazon Web Services and collaborated with NVIDIA on AI infrastructure and robotics.

💰 STMicroelectronics anticipates improving gross margins through 2026 due to better factory utilization and a favorable product mix.

📈 Analog Devices delivered record second-quarter fiscal 2026 revenues and earnings driven by broad-based demand across key markets.

🔋 ADI plans to acquire Empower Semiconductor to strengthen its power management portfolio for next-generation AI computing platforms.

📉 Zacks Consensus estimates STM 2026 EPS at $1.25 (up 135.9% YoY) and ADI 2026 EPS with a 58.2% rise.

📈 STM stock has surged 150.2% in the past six months compared to ADI's 30.8% gain over the same period.

💵 STM trades at a forward P/E of 33.66X while ADI trades at 28.47X, reflecting different valuation dynamics.

🏆 Both companies currently hold a Zacks Rank #1 (Strong Buy) according to analyst consensus.

Bullish Signals
  • STMicroelectronics expects double-digit revenue growth in 2026 supported by strong booking momentum and a growing pipeline of AI-related opportunities.
  • STM anticipates data center revenues exceeding $500 million in 2026 and surpassing $1 billion in 2027 driven by demand for power semiconductors and silicon photonics.
  • STMicroelectronics has strengthened its competitive position through a multiyear commercial engagement with Amazon Web Services and collaboration with NVIDIA on AI infrastructure.
  • The acquisition of NXP's MEMS sensor business enhances STM's exposure to high-growth markets including cloud computing and advanced automotive sensing.
  • Analog Devices delivered record second-quarter fiscal 2026 revenues and earnings driven by broad-based demand across industrial, automotive, and communications markets.
  • ADI is seeing robust momentum in AI-driven data center infrastructure where both its optical connectivity and power management businesses are growing rapidly.
  • Analog Devices reported record gross and operating margins reflecting favorable product mix, pricing strength, and efficient manufacturing.
  • Analysts have raised STMicroelectronics' 2026 earnings estimates over the past 30 days indicating improving confidence in its outlook.
  • STMicroelectronics stock has surged 150.2% in the past six months significantly outperforming the S&P 500's growth of 8.1%.
  • Both STMicroelectronics and Analog Devices are well positioned to benefit from long-term semiconductor growth trends supported by expanding AI opportunities.
Full Analysis
This article compares semiconductor stocks STMicroelectronics (STM) and Analog Devices (ADI), arguing that both are well-positioned to capitalize on secular trends like AI, industrial automation, and electrification. While ADI is highlighted for its diversified portfolio, superior profitability, and resilient business model, STM currently holds a slight edge due to stronger recent earnings momentum, accelerating analyst estimate revisions, and robust stock performance driven by AI-related growth initiatives. STMicroelectronics expects double-digit revenue growth in 2026 supported by strong booking momentum and a growing pipeline of AI opportunities. The company anticipates data center revenues exceeding $500 million in 2026 and surpassing $1 billion in 2027, driven by demand for power semiconductors, silicon photonics, and optical connectivity. Strategic partnerships with Amazon Web Services and NVIDIA, along with the acquisition of NXP's MEMS sensor business, are enhancing STM's exposure to high-growth markets. Analog Devices reported record second-quarter fiscal 2026 revenues and earnings driven by broad-based demand across industrial, automotive, and communications markets. The company is seeing robust momentum in AI-driven data center infrastructure and plans to acquire Empower Semiconductor to strengthen its power management portfolio. ADI maintains exceptional profitability with record gross and operating margins, supported by a favorable product mix and efficient manufacturing. Analyst consensus estimates project STMicroelectronics' 2026 revenues to grow 22.1% year-over-year with earnings per share surging 135.9% to $1.25 from 53 cents in 2025. Conversely, Analog Devices is forecasted to see 32.3% revenue growth and a 58.2% rise in fiscal 2026 EPS. STM stock has surged 150.2% over the past six months compared to ADI's 30.8%, though ADI trades at a lower forward P/E multiple of 28.47X versus STM's 33.66X.