Analog Devices' Valuation Signal Went Dark in 2024 — Then the Stock Nearly Doubled Anyway
ADI's trailing P/E tripled from 29x to as high as 78x between January 2024 and mid-2026, but the PEG ratio that's supposed to justify a multiple like that stopped computing in December 2024 and still hasn't come back. Here's what actually happened in each phase.
Introduction
In January 2024, Analog Devices traded at roughly 29 times trailing earnings — a full multiple, but one still reasonably tethered to its own three-year earnings growth, with a trailing PEG ratio near 1.1x (SPXScore trailing-data tracking, weekly observations through Aug 11, 2026). By mid-2026, the stock had nearly doubled, trailing P/E had touched 78x, and the PEG ratio that's supposed to say whether a multiple like that is earned had simply stopped existing — undefined, because the earnings-growth number in its denominator had gone negative and stayed there for nearly two years.
That's an unusual arc, and not quite the one this piece was pitched to find. Analog Devices never traded at a genuinely cheap multiple in this window — there was no 2022-style rate-shock trough here. What happened instead is stranger: a GAAP earnings collapse driven almost entirely by acquisition accounting, layered on top of a real cyclical downturn, that broke the market's usual cheap-to-expensive yardstick right as the stock embarked on its steepest re-rating in years. Untangling how much of ADI's climb to $423 reflects a genuine AI-and-industrial recovery, and how much is a market pricing an unanchored multiple on faith, is the point of what follows.
Key Takeaways
- ADI's trailing P/E averaged 29.27x in the first ten weeks of 2024, climbed to an average of 53.09x as GAAP earnings collapsed through the rest of the year, and has averaged in the mid-60s since — peaking at 77.93x the week of May 27, 2026 (SPXScore trailing-data tracking).
- Fiscal 2024 GAAP diluted EPS fell to $3.28 from $6.55 the prior year, driven by a 23% full-year revenue decline during an "unprecedented" industrial inventory destocking cycle plus $1.78 billion of Maxim Integrated-related acquisition and restructuring charges excluded from non-GAAP results (ADI FY2024 GAAP EPS $3.28 vs. non-GAAP $6.38; Analog Devices Q4/FY2024 results, Nov 26, 2024).
- The stock's trailing three-year EPS growth rate crossed negative in December 2024 and was still negative (-4.58%) as of the most recent reading, which is why the trailing PEG ratio has been undefined for roughly 20 months even as the multiple kept climbing.
- A broad April 2025 tariff selloff dragged ADI to $166.09 (week of April 2, 2025), with Morningstar calling the stock oversold at the time; the recovery that followed was fueled first by a tariff-driven pull-forward in automotive orders (+24.2% YoY in fiscal Q2 2025) and later by an AI-linked data center boom, with data center revenue up more than 90% year-over-year and exceeding 75% of communications-segment revenue by fiscal Q2 2026 (Analog Devices Q2 FY2026 results, May 20, 2026).
- Wall Street is now split on whether today's price already reflects that story: consensus price targets cluster near $451 against an Aug 11, 2026 close of $385.30 (about 17% implied upside), while several trackers flag the stock as "Hold — wait for a pullback" given a P/E "near peak multiples," with fiscal Q3 2026 results due August 19, 2026, just three days after this piece was written.
Four Windows, and a Metric That Broke in the Middle
Pull Analog Devices' trailing GAAP price-to-earnings ratio across four stretches since January 2024, and the shape isn't a clean value-to-optimism climb so much as a multiple that kept expanding for two different reasons — first because the earnings denominator collapsed, and later because the market started paying up for growth it can no longer measure with the usual ratio:
- January–mid-March 2024 (The Last Grounded Reading): Price held in a narrow $185–$201 band. Trailing EPS was flat at $6.54. Trailing P/E averaged 29.27x, with a trailing PEG of about 1.13x — a full multiple, but one still roughly proportional to a trailing three-year EPS growth rate of 25.91%.
- Mid-March–December 2024 (The EPS Air Pocket): Price actually rose modestly, from $188.96 to $212.46, while trailing EPS fell in four discrete steps — $6.54 → $5.59 → $4.27 → $3.32 → $3.28 — as each new quarterly print replaced a much stronger year-ago quarter. Trailing P/E ballooned to an average of 53.09x, touching 70.93x in October, purely because the denominator was shrinking under a stable-to-rising price.
- 2025 (The No-PEG Wilderness): Price swung from a $166.09 low in early April to a $292.94 high by year-end — a round trip of roughly 76%. Trailing EPS recovered from $3.28 to $4.57. Trailing P/E averaged 64.62x across the year, ranging from 52.96x to 74.41x, with the PEG ratio undefined every single week because trailing three-year EPS growth had gone negative in December 2024 and stayed there.
- January–August 2026 (Priced for the AI Story): Price climbed further, from $296.21 to a record $423.20 on May 27, 2026, before cooling to $385.30 by August 11. Trailing EPS kept recovering, reaching $6.73. Trailing P/E has averaged 66.42x across the window, peaking at 77.93x — still with no PEG, because the deep 2024 trough remains inside the three-year lookback that feeds the growth calculation.
Notice that the multiple keeps climbing across all four bars — there's no round trip back to cheap here, the way there was for some 2022-era rate-shock stories. What changes between the second bar and the fourth is the reason the multiple is high: mechanical EPS collapse in 2024, then genuine price appreciation on genuine (if unevenly distributed) growth in 2025 and 2026.
Phase One: A Multiple That Still Meant Something
Nothing about ADI's valuation in early 2024 was alarming on its face. A 29x trailing multiple against 25.91% trailing three-year EPS growth produced a PEG near 1.1x — the classic shorthand for "paying a fair price for the growth you're getting." Analog Devices had just closed fiscal 2023 with $6.55 in trailing GAAP EPS, still riding the tail end of a multi-year semiconductor upcycle. If you'd stopped reading ADI's valuation story in March 2024, there wouldn't have been much of a story to tell.
What the trailing PEG couldn't see yet was what was about to replace the numerator's denominator: four consecutive quarters, starting with the one reported in May 2024, that would each print a lower GAAP EPS than the quarter it displaced in the trailing sum.
Phase Two: When the Denominator Did All the Work
The mid-2024 multiple expansion is the part of this story that's easiest to misread as "the market getting excited." It wasn't, mechanically. Price rose only modestly across this window — from $188.96 in March to $212.46 by December, a roughly 12% gain. Trailing P/E, meanwhile, nearly doubled, from 29x to an average of 53x, because trailing EPS fell from $6.54 to $3.28, a 50% collapse.
Two forces did that damage, and they compounded rather than offset each other. First, Analog Devices was living through what CEO Vincent Roche called "unprecedented customer inventory headwinds" — an industrial-channel destocking cycle that pulled full fiscal 2024 revenue down 23% to $9.43 billion, after distributors and end customers had overordered through 2022's chip shortage and then spent 2023-2024 working that inventory back down to roughly six weeks of coverage, lean by historical standards (Analog Devices Q4/FY2024 results, Nov 26, 2024). Second, and less visible to anyone only watching non-GAAP headlines, fiscal 2024 carried $1.78 billion in acquisition-related amortization and restructuring charges tied to the integration of Maxim Integrated — the intangible-asset amortization, fair-value adjustments, and facility-consolidation costs from ADI's 2021 acquisition, all excluded from the $6.38 non-GAAP EPS figure the company and most analysts quote, but very much present in the $3.28 GAAP number this article's trailing-P/E series is built on.
That's the mechanical explanation for phase two's eye-catching multiple: it's not that Wall Street decided ADI was suddenly worth 53 times earnings. It's that "earnings," on a GAAP basis, briefly stopped being a reliable yardstick — cut in half by a mix of real cyclical weakness and non-cash acquisition accounting that has nothing to do with the chips ADI actually sold that quarter.
Phase Three: A Round Trip With No Anchor
By the time 2025 opened, trailing three-year EPS growth had already crossed negative — the 2022 and 2023 comparison quarters in that lookback were strong enough that 2024's collapse dragged the whole three-year growth rate below zero. That broke the PEG ratio for the rest of this story: a metric built to divide by growth simply can't function once growth is negative, so from December 2024 forward, ADI's trailing PEG reads as undefined in every weekly observation through the date of this article.
Into that vacuum came 2025's whipsaw. A broad market selloff tied to new tariff announcements sent ADI to $166.09 the week of April 2, 2025 — down more than 30% from its 2025 high — with Morningstar characterizing the stock as oversold at the time, noting ADI carried relatively less exposure to autos and consumer electronics than some semiconductor peers even as tariff fears centered heavily on a threatened 25% automotive-sector tariff (Morningstar). The recovery that followed had a specific, dateable driver: fiscal second-quarter 2025 automotive revenue jumped 24.2% year-over-year to $849.51 million, a beat that industry coverage attributed partly to a high-single-digit pull-in of automotive orders ahead of tariff announcements — customers front-loading purchases before duties could bite, not a clean signal of underlying demand. By fiscal fourth quarter 2025, reported November 25, 2025, the broader recovery had become harder to dismiss as pull-forward alone: full fiscal 2025 revenue reached $11.0 billion, up 17% year-over-year, with GAAP diluted EPS climbing to $4.59 from $3.28 and net income up 39%.
That V-shape is the real story underneath the multiple: a genuine earnings trough in mid-2024, followed by a genuine, if bumpy, recovery. But because the trough is still inside the three-year window that feeds the growth calculation, the PEG ratio can't tell you that yet — it just goes on reading "undefined," even as the line above climbs back toward its old highs.
Phase Four: The AI Story Takes Over, and the Multiple Keeps Climbing
If phase three was ADI recovering from its own destocking cycle, phase four is the market deciding that recovery has a second act: artificial intelligence infrastructure. Fiscal second-quarter 2026 results, reported May 20, 2026, showed revenue of $3.62 billion, up 37% year-over-year and ahead of guidance, with non-GAAP EPS of $3.09 beating a $2.90 estimate by 67% year-over-year growth and gross margin expanding to 73%, up 360 basis points (Analog Devices Q2 FY2026 results, May 20, 2026). The headline detail: data center revenue grew more than 90% year-over-year and now accounts for over 75% of ADI's communications-segment revenue, as AI training racks — drawing 120 to 140 kilowatts today, with next-generation systems projected past 200 kilowatts — created fresh demand for the power-management chips ADI has historically built for industrial and automotive customers. Nine days later, on May 19, 2026, ADI announced a $1.5 billion cash deal to acquire Empower Semiconductor, a Milpitas-based maker of integrated voltage-regulator and silicon-capacitor chips built to deliver power closer to AI processors — a transaction expected to close in the second half of 2026 and contribute meaningfully to revenue only starting in 2027 (Analog Devices press release, May 19, 2026).
The market's first reaction to the Q2 beat was surprisingly cold: shares fell as much as 7% in pre-market trading the morning of the report, a reaction one earnings-call summary attributed directly to valuation — the stock's trailing P/E was already above 70x, "a high earnings multiple that suggests investors had already priced in strong growth expectations" (Investing.com earnings call transcript, May 20, 2026). That reaction didn't hold: ADI closed the week of May 20 at $419.94, above the prior week's $414.31, and continued to a fresh record of $423.20 the following week — buyers stepping back in within days of the same valuation worry that had briefly knocked the stock down.
That acceleration — from a 23% decline to guided growth in the mid-30s — is the real fundamental case for phase four's higher multiple. It's also, by August 2026, becoming Wall Street's central disagreement. Consensus price targets across roughly three dozen analysts cluster near $451, implying meaningful upside from ADI's $385.30 close on August 11, 2026, with KeyBanc at $525 and Cantor Fitzgerald at $550 among the more bullish calls. But several trackers describe the stock's rating as "Hold — wait for a pullback," flagging that ADI sits near its 52-week high with a P/E "near peak multiples" in a semiconductor cycle that "remains volatile," and that analysts' own growth forecasts — 36% revenue growth and 62% EPS growth over the coming year — already assume the AI story keeps compounding roughly as fast as it has. Fiscal third-quarter 2026 results, due August 19, 2026, will be the next test of whether that assumption holds; management has guided to $3.9 billion in revenue and roughly $3.30 in adjusted EPS.
What a Broken PEG Ratio Actually Tells You
Line up all four windows, and the honest summary of Analog Devices' 2024-2026 stretch isn't "cheap stock gets expensive." It's "earnings metric breaks under acquisition accounting and a cyclical trough, and the market spends the next two years re-rating the stock without the tool that would normally check its work." The trailing PEG ratio going dark in December 2024 wasn't a data glitch — it was a real signal that the growth math underlying ADI's valuation had become, for a time, genuinely unmeasurable on a trailing basis. That the stock kept climbing anyway isn't evidence the market ignored the problem; it's evidence the market decided to look past a broken trailing metric toward a forward story — AI-linked data center demand, a recovering industrial and automotive cycle, and a $1.5 billion bet on power-delivery chips for next-generation AI racks — that a backward-looking PEG ratio was never built to price in the first place.
Whether that bet is right is still the open question. Fiscal 2025's 17% revenue growth and fiscal Q2 2026's 37% growth are real, reported numbers, not guidance or hope. But a 66x average trailing multiple, even against genuinely accelerating growth, is a multiple that needs several more years of compounding to look reasonable in hindsight — and the PEG ratio won't be able to confirm or deny that until the 2024 trough finally rolls out of its three-year lookback window, sometime after fiscal 2027 results are in. Until then, anyone using ADI's trailing PEG as a valuation check is, technically, using a tool that doesn't currently produce an answer — a limitation worth remembering the next time a semiconductor stock's earnings collapse and rebound in the same multi-year window. If you want to see how ADI's re-rating compares with the rest of the technology and semiconductor sector, our historical trend view tracks trailing and forward P/E and PEG over time, and the S&P 500 coverage applies the same framework across the full index — including the free S&P 50 subset for a faster read.
Conclusion
Analog Devices in August 2026 is not the same company its 29x trailing multiple described in January 2024 — it's bigger, more AI-exposed through data center power management, and carrying real double-digit revenue growth instead of the double-digit decline it posted just two fiscal years ago. But the valuation tool investors normally reach for to check whether a re-rating like this one is earned has been offline for nearly two years, a casualty of GAAP earnings volatility that had nothing to do with chip demand and everything to do with acquisition accounting. That leaves a genuinely open question heading into the August 19, 2026 earnings report: whether ADI's climb to a 66x average trailing multiple reflects a semiconductor company that has permanently repriced around AI infrastructure demand, or a stock that's simply been re-rated as far as a broken PEG ratio will allow before something — a guidance miss, a cooling AI capex cycle, or just the ordinary math of a three-year lookback finally rolling forward — forces the multiple to answer for itself.
This article discusses Analog Devices' historical stock performance and macroeconomic conditions as of August 16, 2026, for informational purposes only. It is not investment advice or a recommendation to buy or sell any security. Financial data, guidance, and analyst estimates referenced here are subject to revision by the company and by third-party research providers, and Analog Devices' fiscal Q3 2026 results, scheduled for release on August 19, 2026, were not yet available at the time of writing.