In the fast-evolving semiconductor industry, two players stand out: Broadcom Inc. (AVGO) and Analog Devices, Inc. (ADI). Both companies are known for their innovative approaches and extensive product portfolios, yet they cater to slightly different market segments. Broadcom excels in infrastructure software solutions, while Analog Devices focuses on high-performance analog and mixed-signal technologies. As investors, it’s crucial to identify which of these companies aligns best with our investment strategies. Join me as we explore the finer details to determine the more compelling choice for your portfolio.
Table of contents
Company Overview
Broadcom Inc. Overview
Broadcom Inc. (NASDAQ: AVGO) is a global leader in the semiconductor and infrastructure software sector, headquartered in San Jose, California. The company’s mission is to deliver a diverse range of cutting-edge technology solutions that enhance connectivity and performance for its clients across various industries. With a robust market capitalization of approximately $1.69T, Broadcom operates through four key segments: Wired Infrastructure, Wireless Communications, Enterprise Storage, and Industrial & Other. Its extensive product offerings cater to multiple applications, including enterprise networking, telecommunications, and consumer electronics, reflecting its strategic position in the fast-evolving tech landscape.
Analog Devices, Inc. Overview
Analog Devices, Inc. (NASDAQ: ADI) specializes in designing and manufacturing integrated circuits and subsystems that utilize both analog and digital signal processing technologies. Headquartered in Wilmington, Massachusetts, the company aims to provide high-performance solutions for industries ranging from automotive to communications. With a market capitalization of about $138B, Analog Devices focuses on translating real-world signals into digital data and vice versa, underpinning its relevance in the modern digital economy. The firm prides itself on innovation in precision power management and signal processing, making it a key player in its field.
Key similarities and differences
Both Broadcom and Analog Devices operate within the semiconductor industry, focusing on advanced technology solutions for various applications. However, Broadcom enjoys a broader product range, spanning infrastructure software and multiple communication technologies, while Analog Devices emphasizes high-performance analog and mixed-signal processing solutions. This distinction shapes their respective market strategies and customer bases.
Income Statement Comparison
The following table provides a concise comparison of the income statements for Broadcom Inc. and Analog Devices, Inc. for their most recent fiscal years.
| Metric | Broadcom Inc. (AVGO) | Analog Devices, Inc. (ADI) |
|---|---|---|
| Market Cap | 1.69T | 138.06B |
| Revenue | 63.89B | 11.02B |
| EBITDA | 35.49B | 5.03B |
| EBIT | 25.48B | 3.03B |
| Net Income | 23.13B | 2.27B |
| EPS | 4.91 | 4.59 |
| Fiscal Year | 2025 | 2025 |
Interpretation of Income Statement
In the latest fiscal year, Broadcom Inc. experienced substantial revenue growth, increasing from 51.57B in 2024 to 63.89B in 2025, reflecting a strong market demand for its semiconductor solutions. Net income also saw a significant rise, demonstrating improved operational efficiency. Conversely, Analog Devices reported a decline in revenue from 9.43B in 2024 to 11.02B in 2025, but managed to maintain relatively stable profit margins. This suggests that while Broadcom is capitalizing on robust growth, Analog Devices faces pressures that may require strategic adjustments to enhance profitability moving forward.
Financial Ratios Comparison
In this section, I present a comparative overview of key financial ratios for Broadcom Inc. (AVGO) and Analog Devices, Inc. (ADI) for the fiscal year 2025. This analysis will help you gauge the financial health and performance of these two companies.
| Metric | Broadcom Inc. (AVGO) | Analog Devices, Inc. (ADI) |
|---|---|---|
| ROE | 28.4% | 6.7% |
| ROIC | 16.7% | 5.6% |
| 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 | 0.25 |
| Debt-to-Assets | 38.1% | 17.9% |
| Interest Coverage | 7.9 | 9.5 |
| Asset Turnover | 0.37 | 0.23 |
| Fixed Asset Turnover | 25.3 | – |
| Payout Ratio | 48.2% | 84.9% |
| Dividend Yield | 0.65% | 1.66% |
Interpretation of Financial Ratios
Broadcom exhibits strong performance with significantly higher ROE and ROIC compared to Analog Devices, indicating superior profitability and efficiency in generating returns. However, its high P/E and P/B ratios suggest that it may be overvalued relative to its earnings and book value. On the other hand, Analog Devices shows a conservative financial structure with a low D/E ratio and higher liquidity ratios, which could be appealing for risk-averse investors. The high payout ratio implies a commitment to returning value to shareholders, albeit with less room for reinvestment.
Dividend and Shareholder Returns
Broadcom Inc. (AVGO) offers a robust dividend with a payout ratio of 48.2%, reflecting a stable annual yield of 0.65%. The trend in dividend per share has been positive, supported by strong free cash flow. However, caution is warranted regarding the sustainability of these distributions due to potential market fluctuations. In contrast, Analog Devices, Inc. (ADI) also pays dividends but has a higher payout ratio of 84.9%, indicating a significant portion of earnings is returned to shareholders, albeit raising concerns about future growth investments. Both companies engage in share buyback programs, which can enhance shareholder value, though the approach to dividends varies. Ultimately, careful evaluation suggests that both companies are aligning their strategies toward sustainable long-term value creation for shareholders.
Strategic Positioning
Broadcom Inc. (AVGO) holds a significant market share in the semiconductor industry, driven by its diverse product offerings across wired and wireless communications, enterprise storage, and industrial solutions. With a market cap of approximately $1.69T, it faces competitive pressure from Analog Devices, Inc. (ADI), which specializes in analog and mixed-signal technologies with a market cap of around $138B. Both companies are navigating technological disruptions, emphasizing innovation to maintain their positions amidst rapid advancements in semiconductor technology.
Stock Comparison
In analyzing the stock performance of Broadcom Inc. (AVGO) and Analog Devices, Inc. (ADI) over the past year, we observe significant price movements that highlight the trading dynamics and investor sentiment surrounding these companies.
Trend Analysis
Broadcom Inc. (AVGO)
- Over the past year, AVGO has experienced a remarkable price change of +197.17%. This indicates a bullish trend which is characterized by strong upward momentum. Notably, the stock has seen an acceleration in its price movement, with a highest price of 402.96 and a lowest price of 120.47. The standard deviation of 76.27 suggests moderate volatility.
- In the recent period, from September 28, 2025, to December 14, 2025, the price change was +7.59%, maintaining its bullish trend with a trend slope of 4.17. The standard deviation here was 22.05, indicating relatively lower volatility compared to the overall trend.
Analog Devices, Inc. (ADI)
- ADI has shown a solid price increase of +43.41% over the past year, confirming a bullish trend as well. The stock is also experiencing acceleration, with a highest price of 281.29 and a lowest price of 164.6. The standard deviation of 20.62 suggests a lower volatility profile compared to AVGO.
- In the recent period, from September 28, 2025, to December 14, 2025, ADI achieved a price change of +12.83%, reinforcing its bullish trend with a trend slope of 3.2. The standard deviation of 18.28 indicates relatively stable price movements during this timeframe.
Both companies demonstrate strong upward trends, making them compelling considerations for investors looking to enhance their portfolios.
Analyst Opinions
Recent analyst recommendations for Broadcom Inc. (AVGO) and Analog Devices, Inc. (ADI) indicate a consensus rating of “Buy.” Analysts have assigned both companies a “B” rating, reflecting solid fundamentals. For AVGO, the high scores in return on equity and assets suggest strong operational efficiency, while ADI’s performance is bolstered by favorable discounted cash flow metrics. Analysts believe that both companies are well-positioned for growth, making them attractive options for investors looking to enhance their portfolios.
Stock Grades
In this section, I present the latest stock ratings from reputable grading companies for Broadcom Inc. and Analog Devices, Inc.
Broadcom Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Piper Sandler | maintain | Overweight | 2025-12-12 |
| Citigroup | maintain | Buy | 2025-12-12 |
| TD Cowen | maintain | Buy | 2025-12-12 |
| Mizuho | maintain | Outperform | 2025-12-12 |
| Barclays | maintain | Overweight | 2025-12-12 |
| Morgan Stanley | maintain | Overweight | 2025-12-12 |
| B of A Securities | maintain | Buy | 2025-12-12 |
| JP Morgan | maintain | Overweight | 2025-12-12 |
| Benchmark | maintain | Buy | 2025-12-12 |
| Oppenheimer | maintain | Outperform | 2025-12-12 |
Analog Devices, Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| UBS | maintain | Buy | 2025-12-08 |
| Benchmark | maintain | Buy | 2025-11-26 |
| JP Morgan | maintain | Overweight | 2025-11-26 |
| Morgan Stanley | maintain | Overweight | 2025-11-26 |
| Evercore ISI Group | maintain | Outperform | 2025-11-26 |
| Wells Fargo | maintain | Equal Weight | 2025-11-26 |
| Truist Securities | maintain | Hold | 2025-11-26 |
| B of A Securities | maintain | Buy | 2025-11-26 |
| Baird | maintain | Outperform | 2025-11-26 |
| Cantor Fitzgerald | maintain | Overweight | 2025-09-30 |
Overall, both Broadcom and Analog Devices have received consistent ratings from various reputable analysts. The general trend indicates a strong preference for holding or maintaining positions in these stocks, reflecting investor confidence in their future performance.
Target Prices
The current consensus target prices from reliable analysts for Broadcom Inc. (AVGO) and Analog Devices, Inc. (ADI) indicate positive expectations for both companies.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Broadcom Inc. | 500 | 400 | 452.93 |
| Analog Devices, Inc. | 320 | 258 | 286.38 |
For Broadcom Inc., the consensus target price of 452.93 suggests a potential upside from the current price of 359.90. Similarly, Analog Devices, Inc. has a target consensus of 286.38, which positions it favorably against its current price of 279.26, indicating a potential for growth.
Strengths and Weaknesses
The following table summarizes the strengths and weaknesses of Broadcom Inc. (AVGO) and Analog Devices, Inc. (ADI), two prominent players in the semiconductor industry.
| Criterion | Broadcom Inc. (AVGO) | Analog Devices, Inc. (ADI) |
|---|---|---|
| Diversification | High | Moderate |
| Profitability | Strong (36% margin) | Moderate (20% margin) |
| Innovation | Strong | High |
| Global presence | Extensive | Strong |
| Market Share | Significant | Growing |
| Debt level | Moderate (0.80) | Low (0.25) |
Key takeaways indicate that while Broadcom exhibits a strong profitability and extensive global presence, Analog Devices shows a lower debt level and significant innovation. It’s essential to consider these factors in making informed investment decisions.
Risk Analysis
The table below outlines the key risks associated with Broadcom Inc. (AVGO) and Analog Devices, Inc. (ADI) based on the most recent financial data.
| Metric | Broadcom Inc. (AVGO) | Analog Devices, Inc. (ADI) |
|---|---|---|
| Market Risk | Moderate | Moderate |
| Regulatory Risk | High | Moderate |
| Operational Risk | Moderate | High |
| Environmental Risk | Low | Low |
| Geopolitical Risk | High | Moderate |
Both companies face significant market and regulatory risks, particularly due to the dynamic nature of the semiconductor industry and evolving regulations. Geopolitical tensions can also impact operations, especially for Broadcom, which has a global footprint.
Which one to choose?
In comparing Broadcom Inc. (AVGO) and Analog Devices, Inc. (ADI), both companies exhibit solid performance metrics. Broadcom shows a higher gross profit margin of 67.77% versus ADI’s 61.47%, indicating better cost management. However, ADI boasts a more favorable price-to-earnings ratio (51.05) compared to AVGO’s (73.87), making it less expensive relative to earnings. Both companies have received a “B” rating, reflecting a balanced outlook. Analysts view Broadcom’s stock trend as bullish, with a 197.17% price change over the last year, while ADI’s price has risen 43.41%.
For growth-oriented investors, AVGO may be the preferred option due to its robust upward momentum. Conversely, those prioritizing valuation and potential for steady returns may consider ADI.
Risks to consider include market volatility and competition within the semiconductor industry.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Go further
I encourage you to read the complete analyses of Broadcom Inc. and Analog Devices, Inc. to enhance your investment decisions:
