Following Analog Devices' (ADI.US) better-than-expected quarterly results earlier this week, BNP Paribas highlighted the analog chipmaker's potential for "broad-based growth" next year. Analyst David O'Connor noted in a client report, "Strong performance and guidance suggest broad-based growth in fiscal 2026, driven by data center and industrial demand, alongside market share gains and cyclical recovery." O'Connor maintained an "Outperform" rating on Analog Devices and raised the price target from $300 to $310.

He further analyzed that the results demonstrate the company's outperformance relative to peers during the industry cycle. "For fiscal 2026, management remains optimistic, expecting broad-based growth led by data center and industrial segments, though adopting a more cautious stance on automotive due to tariff and macroeconomic concerns."

Beyond hyperscale data center operators driving demand, AI-related spending is boosting HBM4 memory needs, subsequently increasing demand for testing equipment. Shares of Analog Devices rose 2.34% on Wednesday.