Analog Devices, Inc.

(NASDAQ Global Select)
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Bullish +55

Analog Devices Vs NVIDIA: Which Stock Is The Better Buy?

Acquisition Capital raising AI-generated analysis

πŸ“Š Analog Devices expects adjusted gross margins to rise to approximately 74% in fiscal Q4 2026 due to improved product mix and price increases.

πŸ“‰ NVIDIA has reset its margin outlook, expecting gross margins to bottom at 71% to 72% in fiscal Q4 2027 before price hikes take effect.

πŸ’° Analog Devices recently completed the acquisition of Alif Semiconductor for $1.35 billion and paid $1.5 billion for Empower Semiconductor in July 2026.

🏦 NVIDIA has invested nearly $50 billion in frontier AI labs, with management expecting these supported labs to comprise roughly a quarter of its business next year.

πŸ“ˆ Analog Devices returned more than all of its free cash flow over the past twelve months to shareholders before its recent bond sale.

πŸ” At the November 11, 2026 close, NVIDIA traded at 21.8 times trailing earnings while Analog Devices traded at 48.1 times.

πŸš€ NVIDIA revenue grew 83.4% over the four quarters to July 26, 2026, compared to a 33.6% increase for Analog Devices.

πŸ’΅ NVIDIA recorded a 65.2% GAAP operating margin over its latest twelve months, up from 58.1% a year earlier.

πŸ“‰ Analog Devices' operating margin climbed to 35.7%, rising faster than NVIDIA's but starting from a lower base of 25.3%.

πŸ’³ NVIDIA's debt is 0.9% of its market value compared to 4.6% for Analog Devices based on the August 1, 2026 balance sheet.

πŸ“… NVIDIA is scheduled to report Q3 FY2027 results on November 17, 2026, followed by Analog Devices reporting Q4 FY2026 results on November 24, 2026.

Bullish Signals
  • Analog Devices expects its adjusted gross margin to rise to about 74% in fiscal Q4 2026, driven by a better product mix, higher volumes, and its own price increase.
  • The company returned more than all of its free cash flow over the past twelve months to shareholders before its September bond sale.
  • Analog Devices offers a business far less tied to AI alone compared to NVIDIA's heavy reliance on data center sales.
  • Analog Devices' operating margin rose faster, climbing to 35.7% from 25.3% over the latest twelve months.
Risk Factors
  • Analog Devices carries higher debt relative to its size at 4.6% of market value compared to NVIDIA's 0.9%, based on the August 1, 2026 balance sheet.
  • The company recently raised $3 billion in bonds in September to fund acquisitions, increasing its leverage profile before reporting Q4 FY2026 results.
Full Analysis
Analog Devices (ADI) and NVIDIA (NVDA) are being compared as potential investments within the AI data center sector, with ADI management estimating its AI exposure at approximately 20% of total revenue. This figure combines its Analog Test Equipment (ATE) and data center businesses, distinguishing it from NVIDIA's heavy reliance on data center sales which accounted for $89 billion of its $96 billion fiscal Q2 2027 revenue. Regarding financial guidance provided in August 2026, Analog Devices expects its adjusted gross margin to rise to about 74% in fiscal Q4 2026, driven by a better product mix, higher volumes, and price increases. Conversely, NVIDIA reset its margin outlook due to memory prices rising more than anticipated, expecting gross margins to bottom between 71% and 72% in fiscal Q4 2027 before its own price increases take effect in fiscal Q1 2028. The two companies differ significantly in their capital allocation strategies and growth profiles. Analog Devices recently acquired Empower Semiconductor for $1.5 billion and Alif Semiconductor for $1.35 billion, while returning all free cash flow to shareholders over the past twelve months. In contrast, NVIDIA has invested nearly $50 billion in frontier AI labs, creating a business model where roughly a quarter of its future revenue depends on the performance of these supported labs. Valuation metrics show NVIDIA trading at 21.8 times trailing earnings compared to Analog Devices' 48.1 times, with NVIDIA demonstrating faster revenue growth of 83.4% versus ADI's 33.6%. While NVIDIA maintains a wider operating margin and lower debt-to-market value ratio, Analog Devices is closing the gap on margins and offers a business less tied exclusively to AI demand.