We recently published a list of 15 Best Big Tech Stocks to Buy According to Analysts. In this article, we are going to take a look at where Analog Devices, Inc. (NASDAQ:ADI) stands against other best big tech stocks to buy according to analysts.
Big Tech comprises some of the largest and most influential companies in the world, recognized for their sheer size, extensive customer base, and financial strength. Leading this group are five major companies that have been at the forefront of the tech sector economy, driving innovation and shaping consumer behavior. Over the years, Big Tech firms have benefited from the widespread adoption of smartphones and high-speed internet, increased demand for digital services, the rise of social media, strong demand for cloud computing, e-commerce, and digital advertising.
How Did the Big Tech Companies Become The Giants They are Today?
Beyond technological advancements, these companies have also benefited from several phenomena. The first is network effects—the more users a platform has, the more valuable it becomes. Other contributing factors include economies of scale as they expanded through acquisitions and the ease of scaling digital businesses globally; access to vast amounts of user data used to enhance products, target ads, and create highly personalized services; and their deep pockets (strong balance sheets) that enabled them to invest heavily in R&D, hire top talent, and operate during challenging times. This financial strength also allowed them to aggressively invest in AI and maintain a first-mover advantage. While challenges persist, we believe these companies will continue to innovate, expand their influence, and shape the future of technology.
In a recent interview with Yahoo Finance, Wedbush Securities’ Global Head of Technology Research, Dan Ives, expressed optimism about the future of Big Tech, stating:
“Microsoft’s $80 billion investment announcement and then Mark Zuckerberg’s announcement that his company plans to spend up to $65 billion on artificial intelligence is “the start of a massive build-out of AI Capex” that I think the Street is massively underestimating. And it’s the multiplier – every dollar spent on a NVIDIA chip, means $8 to $10 multiplier goes to the rest of tech – that’s bullish for tech. Of course, with Trump and Stargate, it just shows that fourth industrial revolution is just starting.”
While Big Tech typically refers to the top five mega-cap companies, we have prepared an extended list of 15 stocks that have made a significant impact on the tech landscape and are equally innovative and transformative as the top five.
Our Methodology
To list the 15 best Big Tech stocks to buy according to analysts, we screened companies with market capitalization of at least $100 billion and potential upside of at least 15%. Ultimately, the stocks were arranged in ascending order of their potential upside.
Note: All pricing data is as of market close on February 3.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A technician working on power management in a semiconductor factory.
Analog Devices, Inc. (NASDAQ:ADI)
Upside Potential: 24%
Number of hedge funds: 63
Analog Devices, Inc. (NASDAQ:ADI) is a prominent global semiconductor company focusing on data conversion and signal processing technology. The firm designs and manufactures a vast array of analog, mixed-signal, and digital signal processing (DSP) integrated circuits (ICs). It caters to various sectors, including automotive, industrial, communications, and consumer electronics, by offering solutions that enhance performance and efficiency in electronic systems.
Technological trends such as ubiquitous sensing, hyperscale and edge computing, AI, and pervasive connectivity are driving the continuous evolution of new generations of applications, thereby increasing the demand for Analog Devices, Inc. (NASDAQ:ADI)’s high-performance analog, mixed-signal, power, and RF ICs. With a robust pipeline of new products, deep domain expertise, and a commitment to expanding its market presence, the company aims to capture a larger market share.
In mid-January 2025, the U.S. Department of Commerce signed four non-binding preliminary contracts under the CHIPS and Science Act to provide up to $105 million in direct funding to Analog Devices, Inc. (NASDAQ:ADI). Upon receiving the investment, CEO and Chairman Vincent Roche stated:
“ADI is at the forefront of innovation in the expansion of U.S. semiconductor manufacturing. Our focus on enabling innovation at the Intelligent Edge is driving advancements in process technologies that are critical to our global customer base. This investment will help us strengthen our workforce training and community partnerships, as well as expand our efforts to manage our environmental footprint.”
Overall, ADI ranks 9th on our list of best big tech stocks to buy according to analysts. While we acknowledge the potential of ADI to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ADI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.