Will Choosing Analog Devices (ADI) Prove to Be a Wise Investment Decision?

Kovitz Investment Group Partners, LLC, an investment management company, released its “Kovitz Core Equity Strategy” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the second quarter, the strategy returned 7.9% compared to the S&P 500’s 10.9% return. Equity markets saw notable volatility after the President's "Liberation Day" tariff announcement on April 2nd. The S&P 500 dropped 11% initially but later rallied 25% in the quarter after the tariffs were postponed by 90 days on April 9th. Additionally, you can review the fund’s top 5 holdings to see its best picks for 2025.

In its second-quarter 2025 investor letter, Kovitz Core Equity Strategy highlighted stocks such as Analog Devices, Inc. (NASDAQ:ADI). Analog Devices, Inc. (NASDAQ:ADI) designs, manufactures, tests, and markets integrated circuits (ICs), software, and subsystem products. The one-month return of Analog Devices, Inc. (NASDAQ:ADI) was -9.08%, and its shares gained 9.62% of their value over the last 52 weeks. On August 5, 2025, Analog Devices, Inc. (NASDAQ:ADI) stock closed at $220.68 per share, with a market capitalization of $109.512 billion.

Kovitz Core Equity Strategy stated the following regarding Analog Devices, Inc. (NASDAQ:ADI) in its second quarter 2025 investor letter:

"We reestablished a position in Analog Devices, Inc. (NASDAQ:ADI) after the stock declined 30% from the point at which we sold it in late February. Analog is a technology leader in the analog semiconductor industry, a specialized market under the larger semiconductor banner. The company is characterized by 70% gross margins and #1 and #2 market positions in key segments within the industry. The company’s principal competitive advantage is its base of 11,000 analog engineers, skilled craftspeople with their education augmented by an average of over 7 years of on-the-job experience. We consider this engineering “asset” irreplaceable. While Analog does have exposure to economically sensitive industries like automotive production, industrial production, and “pro-sumer” electronics, its products are in high demand given that they enable most other cutting-edge technology products and processes that exist. High gross margins provide insulation against tariff effects. Given the better stock price, we think that having exposure to Analog stock over the next 5-7 years will be good for clients."

Analog Devices, Inc. (NASDAQ:ADI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 79 hedge fund portfolios held Analog Devices, Inc. (NASDAQ:ADI) at the end of the first quarter, which was 64 in the previous quarter. While we acknowledge the potential of Analog Devices, Inc. (NASDAQ:ADI) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Analog Devices, Inc. (NASDAQ:ADI) and shared some of the best oversold dividend stocks. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.