Home > Comparison > Technology > AVGO vs ADI
The strategic rivalry between Broadcom Inc. and Analog Devices, Inc. shapes the semiconductor industry’s evolution. Broadcom operates as a capital-intensive technology titan, blending semiconductors with infrastructure software. Analog Devices excels as a precision analog and mixed-signal IC innovator, targeting diverse industrial and automotive markets. This analysis pits Broadcom’s scale against Analog Devices’ specialized expertise to identify the superior risk-adjusted investment for a balanced portfolio.
Table of contents
Companies Overview
Broadcom and Analog Devices both dominate the semiconductor sector with distinct strategies and market footprints.
Broadcom Inc.: Semiconductor Powerhouse and Infrastructure Innovator
Broadcom Inc. excels as a global technology leader designing and supplying semiconductor and infrastructure software solutions. Its core revenue derives from diversified segments including wired infrastructure, wireless communications, and enterprise storage. In 2026, Broadcom sharpens its strategic focus on expanding complex sub-systems and firmware that bridge analog and digital domains across data centers and industrial applications.
Analog Devices, Inc.: Precision Analog and Signal Processing Specialist
Analog Devices, Inc. stands out as a premier designer and manufacturer of integrated circuits leveraging analog, mixed-signal, and digital signal processing technologies. Its revenue engine centers on data converters, power management ICs, and high-performance amplifiers servicing automotive, industrial, and communications markets. The company’s 2026 strategy emphasizes innovation in microelectromechanical systems and digital signal processing to deepen its presence in high-end applications.
Strategic Collision: Similarities & Divergences
Both firms compete fiercely in the semiconductor industry but diverge in approach: Broadcom pursues a broad, integrated ecosystem spanning hardware and software, while Analog Devices focuses on precision analog and signal processing specialization. Their primary battleground lies in industrial and communications infrastructure. This contrast defines their investment profiles—Broadcom as a diversified tech giant, Analog Devices as a niche innovator with deep technical moats.
Income Statement Comparison
This data dissects the core profitability and scalability of both corporate engines to reveal who dominates the bottom line:
| Metric | Broadcom Inc. (AVGO) | Analog Devices, Inc. (ADI) |
|---|---|---|
| Revenue | 63.9B | 11.0B |
| Cost of Revenue | 20.6B | 5.0B |
| Operating Expenses | 17.8B | 3.0B |
| Gross Profit | 43.3B | 6.0B |
| EBITDA | 34.7B | 5.0B |
| EBIT | 25.9B | 3.0B |
| Interest Expense | 3.2B | 318M |
| Net Income | 23.1B | 2.3B |
| EPS | 4.91 | 4.59 |
| Fiscal Year | 2025 | 2025 |
Income Statement Analysis: The Bottom-Line Duel
This income statement comparison reveals the true efficiency and profitability of Broadcom Inc. and Analog Devices, Inc. between 2021 and 2025.
Broadcom Inc. Analysis
Broadcom’s revenue surged from $27.5B in 2021 to $63.9B in 2025, more than doubling. Net income grew even faster, leaping from $6.4B to $23.1B, signaling powerful margin expansion. Its gross margin rose to 67.8%, while net margin reached 36.2%, reflecting exceptional operational leverage and a strong profit engine in 2025.
Analog Devices, Inc. Analysis
Analog Devices posted steady revenue growth from $7.3B in 2021 to $11.0B in 2025, a solid 51% increase. Net income expanded from $1.4B to $2.3B, supported by a gross margin of 54.7% and a net margin of 20.6%. The company sustained healthy margin improvements but on a more moderate scale compared to its peer.
Verdict: Margin Power vs. Revenue Scale
Broadcom dominates in both revenue scale and margin power, boasting a net margin nearly double that of Analog Devices. Its rapid growth and superior profitability highlight a highly efficient capital allocation strategy. Analog Devices presents a stable, less aggressive growth profile with respectable margins, appealing to more conservative investors. Broadcom’s robust margin expansion makes it the standout performer for those prioritizing earnings efficiency.
Financial Ratios Comparison
These vital ratios act as a diagnostic tool to expose the underlying fiscal health, valuation premiums, and capital efficiency of the companies compared below:
| Ratios | Broadcom Inc. (AVGO) | Analog Devices, Inc. (ADI) |
|---|---|---|
| ROE | 28.4% | 6.7% |
| ROIC | 16.4% | 5.5% |
| P/E | 73.9 | 51.1 |
| P/B | 21.0 | 3.4 |
| Current Ratio | 1.71 | 2.19 |
| Quick Ratio | 1.58 | 1.68 |
| D/E | 0.80 | 0.26 |
| Debt-to-Assets | 38.1% | 18.1% |
| Interest Coverage | 7.94 | 9.45 |
| Asset Turnover | 0.37 | 0.23 |
| Fixed Asset Turnover | 25.3 | 3.32 |
| Payout ratio | 48.2% | 84.9% |
| Dividend yield | 0.65% | 1.66% |
| Fiscal Year | 2025 | 2025 |
Efficiency & Valuation Duel: The Vital Signs
Ratios act as the company’s DNA, revealing hidden risks and operational excellence that drive long-term shareholder value.
Broadcom Inc.
Broadcom posts a robust 28.45% ROE and a stellar 36.2% net margin, signaling strong profitability. However, its valuation appears stretched with a P/E of 73.87 and a P/B of 21.01. The modest 0.65% dividend yield contrasts with significant reinvestment in R&D, fueling future growth.
Analog Devices, Inc.
Analog Devices delivers a modest 6.7% ROE and a 20.58% net margin, reflecting solid but less efficient profitability. Its P/E stands at 51.05, also on the expensive side but lower than Broadcom’s. The company maintains a healthier balance sheet with lower debt and a 1.66% dividend yield, signaling moderate shareholder returns.
Premium Profitability vs. Conservative Payouts
Broadcom’s superior profitability comes at a premium valuation, while Analog Devices offers a more balanced risk profile with steady dividends and lower leverage. Investors seeking growth might lean toward Broadcom’s aggressive reinvestment, whereas those favoring income and capital discipline may find Analog Devices better aligned.
Which one offers the Superior Shareholder Reward?
Broadcom (AVGO) delivers a modest 0.65% dividend yield with a sustainable 48% payout ratio and robust free cash flow coverage near 98%. Its aggressive buyback program, fueled by strong operating margins above 36%, complements dividends for total return. Analog Devices (ADI) pays a higher 1.66% yield, but with a higher 85% payout ratio and lower buyback intensity, risking cash flow strain. ADI’s reinvestment in capex and R&D supports growth but limits immediate shareholder distributions. I favor Broadcom’s balanced dividend and buyback strategy for superior, sustainable shareholder reward in 2026.
Comparative Score Analysis: The Strategic Profile
The radar chart reveals the fundamental DNA and trade-offs of Broadcom Inc. and Analog Devices, Inc., highlighting their financial strengths and valuation challenges:
Broadcom leads in profitability with very favorable ROE and ROA scores (5 each), while Analog Devices shows moderate scores (3 each). Broadcom’s balance sheet is weaker, marked by a very unfavorable debt-to-equity score (1), compared to Analog Devices’ moderate score (2). Both face valuation headwinds, scoring poorly on P/E and P/B metrics, but Broadcom’s overall profile is more polarized, relying heavily on profit efficiency, whereas Analog Devices presents a more balanced, albeit moderate, financial standing.
Bankruptcy Risk: Solvency Showdown
Broadcom’s Altman Z-Score of 11.6 significantly outpaces Analog Devices’ 7.1, signaling a stronger solvency buffer for Broadcom in this cycle:
Financial Health: Quality of Operations
Broadcom scores an 8 on the Piotroski F-Score, indicating very strong financial health, slightly ahead of Analog Devices’ strong 7, which suggests minor red flags relative to Broadcom’s metrics:
How are the two companies positioned?
This section dissects Broadcom and Analog Devices’ operational DNA by comparing their revenue distribution and internal dynamics. The goal is to confront their economic moats and identify which model offers the most resilient competitive advantage today.
Revenue Segmentation: The Strategic Mix
This visual comparison dissects how Broadcom Inc. and Analog Devices, Inc. diversify their income streams and where their primary sector bets lie:
Broadcom anchors its revenue in two dominant segments: Semiconductor Solutions at $36.9B and Infrastructure Software at $27B in 2025. This concentration highlights its ecosystem lock-in and infrastructure dominance. Analog Devices shows a more balanced mix across Automotive ($2.8B), Industrial ($4.3B), Communications ($1.1B), and Consumer ($1.2B) segments in 2024, signaling a diversified portfolio that mitigates concentration risk but lacks Broadcom’s scale in any single domain.
Strengths and Weaknesses Comparison
This table compares the strengths and weaknesses of Broadcom Inc. and Analog Devices, Inc.:
Broadcom Inc. Strengths
- Strong net margin at 36.2%
- High ROE of 28.45%
- Favorable ROIC of 16.36%
- Solid current and quick ratios
- Large global revenue, especially Asia Pacific
- Significant revenue from Infrastructure Software and Semiconductor Solutions
Analog Devices Strengths
- Favorable net margin at 20.58%
- Strong current and quick ratios
- Low debt-to-equity and debt-to-assets ratios
- High interest coverage ratio
- Diversified revenue across Automotive, Industrial, Consumer, Communications
- Stable geographic presence including US, Europe, China
Broadcom Inc. Weaknesses
- Unfavorable high PE (73.87) and PB (21.01) ratios
- Asset turnover low at 0.37
- Dividend yield low at 0.65%
- Moderate debt levels
- Fixed asset turnover high but asset efficiency concerns
Analog Devices Weaknesses
- Low ROE at 6.7%
- Unfavorable PE (51.05) and PB (3.42) ratios
- Asset turnover weak at 0.23
- Dividend yield neutral at 1.66%
- Moderate neutral ROIC vs. WACC
Both companies display slightly favorable overall financial profiles with strong liquidity and global reach. Broadcom emphasizes profitability and scale, while Analog Devices leverages diversified segments and conservative leverage. Each faces valuation challenges and asset efficiency issues that impact strategic flexibility.
The Moat Duel: Analyzing Competitive Defensibility
A structural moat is the sole barrier protecting long-term profits from relentless competitive pressure in the semiconductor sector:
Broadcom Inc. (AVGO): Integrated Solutions and Scale Advantage
Broadcom’s moat stems from its broad product ecosystem and scale, delivering a 7% ROIC premium over WACC and stable 40%+ EBIT margins. Expansion into new infrastructure software deepens its moat in 2026.
Analog Devices, Inc. (ADI): Specialized Signal Processing Expertise
ADI relies on its niche in analog and mixed-signal ICs, driving margin stability but with ROIC below WACC, signaling value erosion. Yet, rising ROIC and innovation in power management hint at future moat recovery.
Verdict: Scale and Integration vs. Niche Specialization
Broadcom’s scale and integrated product suite create a wider, more durable moat than Analog Devices’ specialized focus. I see Broadcom better positioned to defend market share amid intensifying competition.
Which stock offers better returns?
The past year shows distinct price movements: Broadcom’s stock surged sharply before recent deceleration, while Analog Devices accelerated gains with steady buyer dominance.
Trend Comparison
Broadcom Inc. (AVGO) posted a 153.15% price increase over 12 months, marking a bullish trend with decelerating momentum. The stock fluctuated between 120.47 and 402.96, showing high volatility (std dev 78.96). Recent months saw a mild bearish reversal (-3.26%).
Analog Devices, Inc. (ADI) gained 58.66% over the same period, also bullish but with accelerating momentum. Its price ranged from 164.6 to 310.88, with moderate volatility (std dev 26.38). The recent trend strengthened with a 32.35% rise and positive slope.
Broadcom’s overall market performance exceeds Analog Devices’, despite recent weakness. AVGO’s higher volatility contrasts with ADI’s steadier acceleration and buyer volume growth.
Target Prices
Analysts present a cautiously optimistic consensus for Broadcom Inc. and Analog Devices, Inc.
| Company | Target Low | Target High | Consensus |
|---|---|---|---|
| Broadcom Inc. | 370 | 510 | 450.12 |
| Analog Devices, Inc. | 270 | 375 | 316 |
Broadcom’s target consensus of 450.12 exceeds its current price of 331.3, signaling potential upside. Analog Devices shows a moderate premium target of 316 versus its 310.88 price, indicating tempered growth expectations.
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How do institutions grade them?
Broadcom Inc. Grades
Here are the latest institutional grades for Broadcom Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Wells Fargo | Upgrade | Overweight | 2026-01-15 |
| Mizuho | Maintain | Outperform | 2026-01-09 |
| Truist Securities | Maintain | Buy | 2025-12-19 |
| UBS | Maintain | Buy | 2025-12-15 |
| Citigroup | Maintain | Buy | 2025-12-12 |
| Bernstein | Maintain | Outperform | 2025-12-12 |
| Benchmark | Maintain | Buy | 2025-12-12 |
| Oppenheimer | Maintain | Outperform | 2025-12-12 |
| Piper Sandler | Maintain | Overweight | 2025-12-12 |
| Rosenblatt | Maintain | Buy | 2025-12-12 |
Analog Devices, Inc. Grades
The following table shows current grades for Analog Devices, Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Susquehanna | Maintain | Positive | 2026-01-22 |
| B of A Securities | Maintain | Buy | 2026-01-21 |
| Stifel | Maintain | Buy | 2026-01-16 |
| Oppenheimer | Maintain | Outperform | 2026-01-16 |
| Wells Fargo | Upgrade | Overweight | 2026-01-15 |
| Citigroup | Maintain | Buy | 2026-01-15 |
| Keybanc | Maintain | Overweight | 2026-01-13 |
| Truist Securities | Maintain | Hold | 2025-12-19 |
| UBS | Maintain | Buy | 2025-12-08 |
| Truist Securities | Maintain | Hold | 2025-11-26 |
Which company has the best grades?
Broadcom Inc. consistently earns top-tier grades, predominantly Buy and Outperform, with no Hold ratings. Analog Devices, Inc. has several Buy and Outperform grades but also carries Hold ratings. Broadcom’s stronger grades suggest higher institutional confidence, potentially appealing to investors seeking stability and growth.
Risks specific to each company
The following categories identify the critical pressure points and systemic threats facing both firms in the 2026 market environment:
1. Market & Competition
Broadcom Inc.
- Faces intense rivalry in semiconductors with a broad product range but high valuation pressures.
Analog Devices, Inc.
- Competes in niche analog and mixed-signal ICs markets with moderate valuation and slower growth.
2. Capital Structure & Debt
Broadcom Inc.
- Moderate leverage with debt/equity at 0.8 and interest coverage favorable but high debt risk flagged.
Analog Devices, Inc.
- Conservative leverage with low debt/equity at 0.26 and strong interest coverage, indicating financial stability.
3. Stock Volatility
Broadcom Inc.
- Beta at 1.218 implies higher volatility than the market average, increasing risk in turbulent cycles.
Analog Devices, Inc.
- Beta at 1.032 suggests closer alignment with market volatility, offering relatively steadier stock behavior.
4. Regulatory & Legal
Broadcom Inc.
- Operates globally with exposure to tech regulations and trade restrictions that could impact supply chains.
Analog Devices, Inc.
- Faces regulatory scrutiny in diverse markets but less complex product exposure reduces some legal risks.
5. Supply Chain & Operations
Broadcom Inc.
- Complex supply chain with diverse hardware components; risks from geopolitical tensions and material shortages.
Analog Devices, Inc.
- More focused supply chain with specialization in analog ICs; operational risks mitigated by industry niche.
6. ESG & Climate Transition
Broadcom Inc.
- Growing pressure to improve sustainability in semiconductor manufacturing and software solutions.
Analog Devices, Inc.
- Increasing demand for ESG-compliant products but slower transition pace in legacy industrial segments.
7. Geopolitical Exposure
Broadcom Inc.
- Significant global footprint implies exposure to U.S.-China tensions and export controls.
Analog Devices, Inc.
- Global but less expansive footprint; geopolitical risks exist but are more contained.
Which company shows a better risk-adjusted profile?
Broadcom’s most impactful risk lies in its high valuation multiples coupled with leveraged debt, raising financial vulnerability. Analog Devices faces its greatest challenge from moderate profitability and competitive pressures in its niche markets. Despite Broadcom’s leverage concerns, its strong profitability and market scale offer a slightly better risk-adjusted profile. However, Analog Devices’ conservative capital structure and steadier stock volatility provide a compelling defensive stance. Recent data show Broadcom’s elevated P/E and debt-to-equity scores as justified red flags, emphasizing the need for cautious allocation.
Final Verdict: Which stock to choose?
Broadcom Inc. (AVGO) excels as a cash-generating powerhouse with a durable moat, driven by a ROIC comfortably above its WACC. Its unmatched efficiency and strong profitability position it well for aggressive growth portfolios. However, its premium valuation and weaker asset turnover remain points of vigilance.
Analog Devices, Inc. (ADI) boasts a strategic moat rooted in its recurring revenue and solid balance sheet, offering better financial safety than Broadcom. Its steady income growth and healthier leverage make it appealing for investors focused on GARP (Growth at a Reasonable Price) strategies, balancing growth and risk.
If you prioritize aggressive growth and can tolerate higher valuation premiums, Broadcom outshines due to its superior capital efficiency and robust cash flow. However, if you seek more stability with a reasonable growth profile, Analog Devices offers better financial resilience and a safer balance sheet. Both have merits, but your risk appetite and strategy define the better fit.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Broadcom Inc. and Analog Devices, Inc. to enhance your investment decisions:
