ADI vs ALGM: Which Is the Better Buy in 2026?

Same yardstick, side by side (as of August 2026). Valuation lined up like this is most meaningful for two names in the same corner of the market, which these are. Figures are approximate; verify before investing.

The metrics above tell you which is the marginally better business. The bigger risk for most people is not picking the slightly worse stock, it is over-concentrating. ADI and ALGM share themes, so owning both, or adding either to what you already hold, can quietly push a large share of your portfolio into one bet.

This is the part a generic comparison page cannot answer, because it depends on what you own. Connect your brokerage and Walnut shows your real, combined ADI and ALGM exposure, flags overlap with your existing positions, and tells you if adding one would tip you past a concentration you are comfortable with, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.

Analog Devices designs, manufactures, and markets integrated circuits, software, and subsystem products that convert real-world analog signals into digital data and back again. Its core product families include data converters, amplifiers, power management ICs, radio frequency and microwave chips, and MEMS-based sensors such as accelerometers and gyroscopes. ADI sells into four end markets: Industrial (the largest, roughly half of revenue), Automotive, Communications, and Consumer. Revenue is generated primarily through direct sales to original equipment manufacturers and through a global distribution network spanning North and South America, Europe, Japan, China, and the rest of Asia. The company's hybrid manufacturing model combines owned fabs with foundry partnerships, giving it flexibility in capacity and cost management.

Full ADI guide

Allegro MicroSystems is a fabless semiconductor company that designs magnetic sensor integrated circuits and application-specific analog power ICs, then outsources most manufacturing to foundry partners. Its magnetic sensors measure position, speed, and current, and its power ICs include motor drivers, voltage regulators, and LED drivers; it also builds photonic and 3D-sensing parts for LiDAR. The bulk of revenue comes from the automotive market, where its chips sit inside electric powertrains, battery systems, advanced driver-assistance systems (ADAS), and comfort and safety motors, with a second leg in industrial automation, data centers, and clean-energy applications. Allegro holds roughly a quarter to a third of the global market for magnetic sensor ICs, one of the larger positions in that niche, built on more than three decades of magnetic-sensing and power expertise.

Full ALGM guide

Both fit overlapping themes, but they are not interchangeable. The useful comparison is which set of drivers and risks you want exposure to.

• ADI drivers: Industrial Automation and the Intelligent Edge; AI Infrastructure and Automated Test Equipment.
• ALGM drivers: Rising chip content per vehicle; Current sensing and e-mobility leadership.

A faster-growing, richer-valued name usually swings harder, so it suits a longer horizon and a higher tolerance for volatility; a steadier, more cash-generative business suits a more conservative or income-minded investor. The honest test is which set of risks you could hold through a drawdown: Analog semiconductors are cyclical, and a slowdown in industrial capital spending or a prolonged pause in automotive orders can deflate revenue quickly, as seen during the fiscal 2024 trough. For ALGM, the dominant risk is cyclicality and customer concentration in the automotive market, which supplies most of Allegro's revenue, so a downturn in vehicle production, softer EV adoption, or another round of customer inventory destocking can cut sales sharply and quickly.

Pick ADI if you believe its drivers more; ALGM if you believe its. Many investors hold both, but since they share themes, that is a concentrated bet, not diversification. Decide deliberately and check overlap. For the full detail, see the ADI and ALGM guides.

ADI. ADI's trailing P/E of roughly 60 to 70x is above its own 10-year historical average of approximately 38x, reflecting the market's pricing of a sustained earnings recovery and secular growth from industrial automation and AI infrastructure. The forward P/E of approximately 32x is more moderate and assumes continued double-digit earnings growth into fiscal 2026. Free cash flow conversion at 39% of revenue is well above the semiconductor sector average, providing a tangible foundation for the valuation premium, though it does not eliminate the risk of multiple compression if growth expectations are not met.

ALGM. Figures are approximate and tied to the July 2026 asOf date; verify live numbers before acting. Allegro's fiscal year ends in March, so FY2026 covers the period ending March 2026. GAAP earnings can look distorted by one-time items, so the market watches the non-GAAP figures, and on those the stock trades at a high forward multiple that already prices in continued electrification-driven growth.

Headline figures (approximate, June 27, 2026 (based on fiscal year 2025 results reported November 25, 2025, and fiscal Q1 2026 results reported February 18, 2026)): ADI shows revenue (fiscal year 2025) ~$11.0 billion, revenue (fiscal q1 2026) ~$3.16 billion, free cash flow (fiscal year 2025) ~$4.3 billion (~39% of revenue), gross margin (ttm) ~62% to 63%; ALGM shows revenue (fy2026, ended march 2026) ~$890 million, up ~23% year over year, non-gaap eps (fy2026) ~$0.54, more than double the prior year, recent quarterly sales ~$243 million in the latest reported quarter, up ~26% year over year, market cap ~$11 billion (stock in the ~$60s per share).

ADI and ALGM are related but distinct: same themes, different businesses and risks. Neither wins in the abstract; the right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme. Walnut can show your combined ADI and ALGM exposure against your real portfolio. It is not an investment adviser.