Analog Devices (ADI) delivered another solid quarter even amid a high bar, and its July quarter outlook implies a ninth consecutive above-seasonal quarter, Morgan Stanley said in a note Thursday following the company's fiscal Q2 results Wednesday.

The investment firm said that since Analog Devices' results were backed by both "cyclical broadening and secular momentum," it expects the company to keep outpacing competitors.

Morgan Stanley said that 30% of Analog Devices' revenue is backed by "accelerated growth drivers in data center power, data center optical, automated test equipment, and aerospace/defense," while the other 70%, similar to rivals, will likely see an inventory recovery.

Meanwhile, the investment firm said that Analog Devices' planned $1.5 billion acquisition of Empower Semiconductor is "perhaps a test." "Organic growth is generally preferable to inorganic, but given the importance of AI power we think it could prove to be a significant positive," the note said.

Morgan Stanley lifted Analog Devices' price target to $428 from $373, while reiterating the company's overweight rating.

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