What does this company do and how does it make money?

ADI designs analog and mixed-signal semiconductors that convert real-world signals into digital data. The business model benefits from mission-critical applications where switching costs are high and design cycles are long, explaining the 71.2% gross margins in Q1'26.

Five legendary investment frameworks analyzed this company.

Buffett calls ADI a 'wonderful business at a terrible price' while insiders dump $54 million in shares—even 71.2% gross margins can't compute a path through 45.73x earnings. Tap any framework below to explore their complete analysis and see where the legends agree and diverge.

How much cash does it generate and where does it go?

ADI runs a capital-light model with just 8% of cash flow going to capex while returning the majority to shareholders through dividends and buybacks. The heavy R&D investment at 34% of cash flow reflects the innovation requirements of analog semiconductor leadership.

Is the business getting stronger or weaker?

The business shows exceptional near-term momentum with revenue acceleration and margin expansion reaching the 83rd percentile. However, ROIC remains below the cost of capital at 1.94% versus 8.58%, suggesting growth isn't creating economic value despite impressive headline numbers.

What could go wrong and has it survived trouble before?

ADI demonstrates resilience through crises but faces concentration risks with nearly half of revenue from Industrial and significant China exposure. The persistent insider selling during peak performance suggests management sees limited upside from current levels.

At 49.92x sales and 45.73x earnings, ADI commands its highest valuation multiple in history while insiders liquidate $54M in shares.

Is the stock priced for perfection, fair value, or pessimism?

The market prices ADI for sustained excellence with valuations at historical extremes, yet implies only modest 5.51% long-term growth. This disconnect between premium multiples and conservative growth assumptions suggests the market recognizes cyclical risks even while paying for perfection.