Analog Devices' (NASDAQ:ADI) latest results have given the stock a much-needed shot in the arm as it has been underperforming the broader market so far this year. Investors in the chipmaker celebrated its better-than-expected third-quarter results and the accompanying guidance, which turned out to be way better than what Wall Street had anticipated.

So, is this the turnaround Analog Devices needed? To find out, we need to take a closer look at the some of the key trends highlighted by the company's management in the recent earnings call, as they could be crucial to its long-term growth.

An abstract image of an integrated circuit.

Image source: Getty Images.

The consumer business indicates potential iPhone gains

Analog Devices has been in hot water this year as certain analysts believe it lost its Force Touch spot in the next iPhone from Apple (NASDAQ:AAPL) as a part of Cupertino's cost-control exercise. But the performance of the company's consumer business in the latest quarter has put such rumors to bed.

Analog's consumer business grew 36% year over year during the recently reported period, accounting for 16% of the total revenue. This indicates that the company might have benefited from the early builds of the new iPhone.

More importantly, Analog expects its consumer business to improve sequentially during the fourth quarter. This isn't surprising as iPhone 8 builds are expected to hit critical mass starting this month, according to noted Apple analyst Ming-Chi Kuo. And, iPhone shipments are expected to rise 13% during Apple's next fiscal year, which begins in October, setting the stage for further growth in the company's consumer business.

Automotive growth hits a higher gear

Analog Devices has been selling automotive chips for over three years now, but the segment's performance was nothing to write home about until now. The company's latest results clearly indicate that it has started gaining critical mass in this space thanks to its acquisition of Linear Technology earlier this year.

The Linear acquisition boosted Analog's automotive revenue by 25% quarter over quarter, and 69% year over year, with more gains anticipated in the ongoing quarter. But this is just the beginning as the automotive business could become a huge growth opportunity for Analog Devices. The company's internal estimates put its dollar content opportunity per vehicle at $250 currently, though this could double by 2025 as autonomous driving and body electronics applications gain traction.

Overall, Analog Devices puts its potential revenue opportunity from autonomous vehicles at $3 billion. By comparison, the Linear and Analog generated combined automotive revenue of $900 million last year. This indicates that there is a lot of room for growth in the future, and Analog doesn't want to miss this gravy train considering its recent product development efforts.

For instance, it partnered with Renesas Electronics earlier this year to improve the performance of radar systems that are crucial to enabling automotive vehicles. Therefore, Analog Devices' aggressive pursuit of the automotive opportunity could give its revenue a nice boost in the long run.

Industrial gets stronger

The industrial business now supplies almost half of Analog Devices' revenue after recording year-over-year growth of 87% during the latest quarter, largely driven by the Linear Technology acquisition. However, this business could take a breather during the current quarter as Analog projects a flat performance on a sequential basis.

But Analog isn't much concerned about the industrial business' short-term performance since it's targeting fast-growing sub-segments such as factory automation within this space. Analog believes its factory automation solutions can help customers save $2 million thanks to a lower installation time that reduces factory downtime by over eight weeks.

The company sees a $4 billion revenue opportunity in the factory automation space, which is substantially higher than its current annualized revenue run rate of $500 million. On the other hand, the application of advanced robotics technology in factory automation will be another tailwind for the chipmaker.

Analog Devices believes today's factory robots carry twice the semiconductor content as compared to the traditional ones, driven by the inclusion of new technology such as connectivity modules and sensors. The addition of new features to traditional robots could boost Analog's addressable market by $300 million over the next five years, opening up another lucrative avenue for the company to tap.

The Foolish takeaway

Analog Devices might have struggled this year thanks to rumors of a potential loss of business at Apple, but it's sitting on a number of powerful catalysts that could drive long-term growth. The company's industrial and automotive businesses are growing impressively due to secular trends, while a boost in iPhone production over the next year will power the consumer business higher.

Therefore, it won't be surprising if Analog Devices' fortunes on the stock market change after a tepid performance so far in 2017.

Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool has a disclosure policy.