Semiconductor company Analog Devices (ADI) is in advanced discussions to acquire privately held Empower Semiconductor for about $1.5 billion in cash, Bloomberg reported. While a deal could be announced as early as Tuesday, a source told Bloomberg that a final agreement hasn’t been reached and the discussions could end without a deal.
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Why Analog Is Keen to Acquire Empower
Empower provides voltage-regulating chips for AI and high-performance computing (HPC) processors. The company claims that its FinFast technology helps reduce energy footprint and total cost of ownership of data centers.
By acquiring Empower, Analog aims to bolster its high-performance computing infrastructure. The news of the deal comes amid rising demand for power management and energy efficiency solutions in AI chips. These energy-efficient AI chips are required to support complex AI workloads.
ADI stock has rallied 55% year-to-date, driven by strong demand for its chips needed to support rapid AI-led growth in data centers.
Is ADI a Good Stock to Buy?
Given the robust demand backdrop, Wall Street has a Strong Buy consensus rating on Analog Devices based on seven unanimous buys. The average ADI stock price target of $445.71 indicates 6.5% upside potential.
