By Nate Wolf

Analog Devices may be investors' best bet in, well, analog devices, analysts at Cantor Fitzgerald say.

The Cantor Fitzgerald team issued an upbeat near-term outlook for the analog semiconductor industry, arguing that stocks in the group, which includes names like Texas Instruments, ON Semiconductor, Microchip Technology, and NXP Semiconductors, has hit bottom.

Analog semiconductors measure things like sound, temperature, and light, as opposed to the advanced AI chips made by companies like Nvidia and Advanced Micro Devices.

Analog Devices was the headliner. Cantor Fitzgerald upgraded the stock to Overweight from Neutral and lifted its target for the price to $270 from $250.

Shares were up 1.2% to $230.21 on Wednesday.

Industry revenues, which have fallen roughly 25% below their peak, have finally hit bottom, the Cantor Fitzgerald analysts argued. While the shape of the recovery is up for debate, the analog market tends to be extremely cyclical, which makes the category a decent bet, they said.

"The group is underowned today, and with recession risk declining we expect Analog to continue trading higher through this upcoming earnings season," the analysts wrote.

Analog Devices hasn't been immune to the recent down cycle -- its revenue peaked in 2023 -- but it is also best positioned for a return to form, Cantor Fitzgerald thinks.

"ADI is currently the darling of Analog names, and rightfully so, as the best-in-class asset with the highest exposure to high-performance, differentiated parts. " the analysts wrote.

The company's exposure to industrial buyers, whose performance has shown signs of rebounding in recent months, also gives it a leg up. Roughly 45% of Analog Devices' 2024 revenue came from its industrial segment, the largest share among the major analog semiconductor players Cantor Fitzgerald examined.

In addition to the Analog Devices upgrade, Cantor Fitzgerald issued an Overweight rating for NXP, calling it "perhaps the best value play" of the group. The analysts reiterated a Neutral rating for Texas Instruments, and initiated coverage of ON and Microchip, assigning both Neutral ratings.

All four stocks were up narrowly after the opening bell.

Write to Nate Wolf at nate.wolf@barrons.com

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June 18, 2025 10:10 ET (14:10 GMT)

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