Analog Devices forecast fourth-quarter revenue and adjusted profit above Wall Street expectations, supported by continued demand for its power-management and data-processing chips used in data centers and industrial applications. The chipmaker also reported stronger-than-expected third-quarter results, with revenue rising 40% from a year earlier.
Analog Devices forecast fourth-quarter revenue and adjusted earnings above analysts' expectations on Wednesday, as growing investment in artificial intelligence infrastructure continues to support demand for its semiconductor products, according to Reuters.
The company expects fourth-quarter revenue of $4.3 billion, plus or minus $100 million, compared with the $4.07 billion average analyst estimate compiled by LSEG. Adjusted earnings are expected to reach $3.86 per share, above the $3.54 analysts had forecast.
Analog Devices' components are used to manage power and move data in a range of applications, including data centers, industrial equipment and vehicles. The company is benefiting from increased spending on AI computing infrastructure, which requires substantial semiconductor capacity for power management and data transmission.
For the third quarter, Analog Devices reported revenue of $4.02 billion, up 40% from the same period a year earlier and above analysts' estimate of $3.92 billion. Adjusted earnings per share came in at $3.45, beating the $3.33 expected by analysts.
Chief Executive Officer Vincent Roche said the company benefited from broad based demand during the quarter. He added that investments in innovation, customer relationships and manufacturing capabilities are positioning Analog Devices to take advantage of opportunities associated with the expansion of AI.
The company's outlook highlights the broader impact of AI investment across the semiconductor industry. While AI computing has driven strong demand for advanced processors, it has also increased demand for supporting components involved in power management, connectivity and data movement. Analog Devices' shares, which had gained about 39% this year before the announcement, were little changed in premarket trading.
The company's stronger forecast comes as semiconductor manufacturers continue to assess how rapidly AI-related infrastructure spending will translate into demand across different areas of the chip market. For Analog Devices, the latest results indicate that AI investment is contributing to demand beyond the processors used to train and run AI models.
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