Evercore ISI Reiterates $ADI at Outperform, PT $387 Analyst comments: "Positive set-up indicators: 1) investors remain underweight analog/MCU semis into 1Q earnings; 2) our checks indicate improving cyclical signals and price hikes on certain legacy products; 3) most momentum indicators are trending positively; and 4) supply chain reads are showing positive signs, with EMS inventories restocking and auto Tier 1/OEM inventories below normal. Negative set-up indicators: We think the positive indicators are partially offset by negative indicators: 1) ADI trades at a 60% premium on an NTM P/E basis to its 10-year median and a 41% premium relative to the S&P 500; 2) ADI outperformed the S&P 500 by 70% over the past six months; 3) ADI outperformed the S&P 500 by 14% over the past week; and 4) mixed customer feedback. AI revenues accelerating: We think momentum in data center will contribute to accelerating revenue in communications. Last quarter, ADI highlighted that AI-exposed revenues now represent nearly 20% of overall revenues at a $2 billion+ run rate. Of that, 40% is related to Automated Test Equipment, 30% is related to data center power, and 30% is related to data center optical revenues. Management expects to gain content in pin electronics, device power supplies, hot-swap protection, intermediate bus converters, multiphase controllers, and more. Positive set-up indicators: investors are underweight analog/MCU; most momentum indicators are trending positively; ADI’s guide versus seasonality has improved from +2% to +3% to +8% over the past three quarters; channel checks show improving cyclical signals; and supply chain reads are positive. Cautious set-up indicators: ADI is +80% versus the S&P 500’s +11% over the past six months; ADI’s NTM P/E is 34x and relative to the S&P 500 is 1.6x, a 61% and 41% premium to its 10-year median, respectively; and ADI is +20% versus the S&P 500’s +7% since 4Q25 earnings." Analyst: Mark Lipacis