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Key Takeaways Cadence reports Q2 results on July 27, with EPS and revenues expected to rise more than 20%.Recurring revenues, an $8 billion backlog and rising EDA spending support Cadence's outlook.Macroeconomic uncertainty, U.S.-China tensions and stiff competition remain concerns. Cadence Design Systems, Inc. (CDNS - Free Report) will release results for the second quarter of 2026 on July 27.

The Zacks Consensus Estimate for second-quarter earnings is $2.05 per share, unchanged in the past 60 days. The consensus mark implies a 24.2% increase from the year-ago actual. The Zacks Consensus Estimate for revenues is pinned at $1.58 billion, indicating a nearly 23.6% uptick from the year-ago actual.

Management expects revenues to be $1.555-$1.595 billion for the second quarter. The company reported sales of $1.275 billion in the year-ago quarter. Non-GAAP EPS is anticipated to be between $2.02 and $2.08. The company reported an EPS of $1.65 in the year-ago quarter. Non-GAAP operating margin is estimated to be between 44.5% and 45.5% in the second quarter.

Cadence has an impressive earnings surprise history. The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 5.48%.

Price Performance
Image Source: Zacks Investment Research

CDNS stock has gained 2.7% in the past six months against the Computer-Software industry’s decline of 22.7%. The S&P 500 composite and the Zacks Computer and Technology sector have risen 5.6% and 8.7%, respectively, in the same time frame.

Factors Shaping CDNS’ Q2 ResultsBroad-based momentum across electronic design automation (“EDA”), IP and System Design & Analysis (“SDA”), supported by robust bookings, improving pricing dynamics and sustained demand tied to AI-driven semiconductor complexity, remains a key catalyst.

AI has been driving a major transformation in semiconductor and system design and Cadence is deeply integrated into this shift. Design activity across several verticals, especially data centers, drones, robotics and automotive, has been robust, due to AI, hyperscale computing and 5G. The focus on Generative AI, Agentic AI and Physical AI has been leading to an exponential increase in computing demand and semiconductor innovation.

Rising customer R&D investments in AI-driven automation have been creating a favorable demand environment for Cadence. On the last earnings call, Management noted that EDA spending has now increased from approximately 7% to 11% of customer R&D budgets, and this is expected to rise further with AI-driven automation.

The launch of ChipStack AI Super Agent (February 2026), the industry’s first agentic AI workflow purpose-built for front-end silicon design and verification, bodes well. Cadence acquired Chipstack, which provides agentic AI solutions for chip verification, in November 2025. On the last earnings call, the company emphasized its agentic AI strategy, including the launch of AgentStack framework and new AI Super Agents (ViraStack and InnoStack) that are designed to automate more of the chip design workflow. Cadence expects agentic tools to drive higher EDA consumption and usage across its platform as customers run more simulations, verification and implementation cycles.

Cadence’s ratable software model and high mix of recurring revenues are other positives. At the end of the first quarter of 2026, Cadence had a backlog of $8 billion.

The company has been collaborating with several tech giants, including Qualcomm and NVIDIA, on their next-generation AI designs across both training and inference. Expanding partnerships with its foundry partners, like Samsung, Taiwan Semiconductor Manufacturing, Intel and Arm Holdings, bodes well.

Ongoing uncertainty prevailing over global macroeconomic conditions, especially U.S.-China tech tensions, along with stiff competition in the EDA space and inflation, remains a concern ahead of the first-quarter earnings. China contributed to about 13% of first-quarter 2026 revenues and management expects 2026 contribution to be about the same percentage.

Taking a Look at SegmentsCore electronic design automation (“EDA”) business (which constitutes Custom IC, Digital IC and Functional Verification businesses) is likely to have gained from demand for the new hardware systems, especially among AI, automotive and high-performance computing clients. Uptake of solutions such as Cerebrus AI Studio, Virtuoso Studio, Xcelium, Verisium SimAI and ChipStack is likely to have cushioned the segment’s performance.

The SDA division is likely to have gained from the increasing demand for BETA CAE solutions, along with 3D-IC, Sigrity and Clarity.  

The IP business has been gaining from an expanding silicon solutions portfolio and increasing demand for solutions in AI, HPC and automotive use cases. The company has been witnessing higher demand for its Star IP portfolio across interface, memory and foundation IP amid higher complexity of advanced node designs and chiplet-based architectures.

Earnings Whispers for CDNSOur proven model does not predict an earnings beat for Cadence this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.

CDNS currently has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Stocks to ConsiderHere are a few stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season.

Celestica (CLS - Free Report) currently has an Earnings ESP of +1.86% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Celestica is scheduled to report quarterly earnings on July 27. The Zacks Consensus Estimate for CLS’ to-be-reported quarter’s earnings and revenues stands at $2.29 per share and $4.35 billion, respectively. Shares of Celestica have gained 96.7% in the past year.

Seagate Technology Holdings plc (STX - Free Report) has an Earnings ESP of +1.75% and a Zacks Rank #1 at present. STX is scheduled to report quarterly figures on July 28. The Zacks Consensus Estimate for Seagate Technology’s to-be-reported quarter’s earnings and revenues is pinned at $5.10 per share and $3.49 billion, respectively. Shares of Seagate Technology are up 505.3% in the past year.

Teradyne (TER - Free Report) has an Earnings ESP of +0.59% and a Zacks Rank #2 at present. The company is scheduled to report quarterly figures on July 28. The Zacks Consensus Estimate for Teradyne’s to-be-reported quarter’s earnings and revenues is pinned at $2.04 per share and $1.22 billion, respectively. Shares of Teradyne are up 314.6% in the past year. 

Posted by Defense World Staff on Jul 19th, 2026

AIA Group Ltd grew its stake in shares of Cadence Design Systems, Inc. (NASDAQ:CDNS – Free Report) by 181.5% in the first quarter, according to its most recent filing with the SEC. The fund owned 60,416 shares of the software maker’s stock after acquiring an additional 38,957 shares during the period. AIA Group Ltd’s holdings in Cadence Design Systems were worth $16,788,000 at the end of the most recent reporting period.

Several other large investors have also modified their holdings of CDNS. Whipplewood Advisors LLC lifted its position in shares of Cadence Design Systems by 933.3% in the 1st quarter. Whipplewood Advisors LLC now owns 93 shares of the software maker’s stock valued at $26,000 after acquiring an additional 84 shares in the last quarter. Brown Lisle Cummings Inc. boosted its stake in shares of Cadence Design Systems by 860.0% during the 1st quarter. Brown Lisle Cummings Inc. now owns 96 shares of the software maker’s stock valued at $27,000 after buying an additional 86 shares during the period. University of Texas Texas AM Investment Management Co. acquired a new stake in shares of Cadence Design Systems during the 4th quarter valued at $28,000. Swiss RE Ltd. purchased a new position in shares of Cadence Design Systems during the 4th quarter valued at $29,000. Finally, Lodestone Wealth Management LLC purchased a new position in shares of Cadence Design Systems during the 4th quarter valued at $30,000. 84.85% of the stock is owned by institutional investors.

Trending Headlines about Cadence Design Systems Here are the key news stories impacting Cadence Design Systems this week:

Positive Sentiment: Benchmark upgraded Cadence to Strong Buy, and recent brokerage commentary put the average price target around $387, indicating Wall Street still sees upside from current levels. Zacks.com Positive Sentiment: Cadence recently launched new AI products, including the AuraStack AI Super Agent for PCB and advanced packaging design, reinforcing the company’s growth narrative in AI-driven design workflows. Business Wire article Positive Sentiment: The company also announced a partnership with Rapidus to advance agentic AI for advanced SoC design, which could support longer-term demand for Cadence’s software tools. Business Wire article Neutral Sentiment: Cadence is due to report second-quarter results on July 27, and some of the weakness may reflect investors taking profits or reducing exposure ahead of earnings. MSN article Negative Sentiment: Shares are also being hit by broader fears that Moonshot and other AI-driven tools could disrupt the EDA industry, pressuring Cadence and peers like Synopsys on concerns about future pricing power and competition. MSN article Analysts Set New Price Targets A number of equities research analysts have recently weighed in on the company. Benchmark started coverage on Cadence Design Systems in a research note on Wednesday. They set a “buy” rating and a $450.00 price target for the company. Robert W. Baird boosted their target price on shares of Cadence Design Systems from $381.00 to $385.00 and gave the stock an “outperform” rating in a research report on Tuesday, April 28th. Wells Fargo & Company increased their price target on shares of Cadence Design Systems from $400.00 to $425.00 and gave the stock an “overweight” rating in a research note on Tuesday, May 26th. Stifel Nicolaus raised their price target on shares of Cadence Design Systems from $395.00 to $432.00 and gave the company a “buy” rating in a report on Tuesday, June 9th. Finally, Needham & Company LLC reissued a “buy” rating and set a $400.00 price objective on shares of Cadence Design Systems in a report on Tuesday, April 28th. One research analyst has rated the stock with a Strong Buy rating, thirteen have assigned a Buy rating and three have issued a Hold rating to the company’s stock. According to MarketBeat.com, the company presently has a consensus rating of “Moderate Buy” and a consensus price target of $393.65.

Get Our Latest Research Report on CDNS

Insider Buying and Selling In other news, VP Paul Scannell sold 10,500 shares of the stock in a transaction on Friday, May 1st. The stock was sold at an average price of $339.00, for a total transaction of $3,559,500.00. Following the sale, the vice president owned 33,946 shares in the company, valued at approximately $11,507,694. This represents a 23.62% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director James D. Plummer sold 1,511 shares of the company’s stock in a transaction dated Thursday, June 11th. The stock was sold at an average price of $381.34, for a total transaction of $576,204.74. Following the transaction, the director owned 23,264 shares in the company, valued at approximately $8,871,493.76. This trade represents a 6.10% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last quarter, insiders have sold 157,057 shares of company stock valued at $60,272,277. Insiders own 0.49% of the company’s stock.

Cadence Design Systems Stock Down 9.5% Shares of NASDAQ CDNS opened at $330.11 on Friday. The stock has a market cap of $91.05 billion, a PE ratio of 76.95, a PEG ratio of 3.91 and a beta of 1.15. The business has a fifty day moving average of $376.09 and a two-hundred day moving average of $328.57. Cadence Design Systems, Inc. has a 52-week low of $262.75 and a 52-week high of $416.69. The company has a debt-to-equity ratio of 0.38, a quick ratio of 1.32 and a current ratio of 1.47.

Cadence Design Systems (NASDAQ:CDNS – Get Free Report) last posted its earnings results on Monday, April 27th. The software maker reported $1.96 earnings per share for the quarter, topping the consensus estimate of $1.91 by $0.05. Cadence Design Systems had a net margin of 21.18% and a return on equity of 28.44%. The business had revenue of $1.47 billion for the quarter, compared to analyst estimates of $1.46 billion. During the same quarter in the prior year, the firm earned $1.57 EPS. The firm’s quarterly revenue was up 18.6% compared to the same quarter last year. Cadence Design Systems has set its FY 2026 guidance at 7.850-7.950 EPS and its Q2 2026 guidance at 2.020-2.080 EPS. As a group, equities research analysts expect that Cadence Design Systems, Inc. will post 6.23 earnings per share for the current fiscal year.

About Cadence Design Systems (Free Report)

Cadence Design Systems, Inc (NASDAQ: CDNS) is a global provider of electronic design automation (EDA) software, hardware and intellectual property used to design and verify advanced semiconductor chips, systems-on-chip (SoCs), printed circuit boards (PCBs) and packaging. Headquartered in San Jose, California and founded in 1988, Cadence serves semiconductor companies, original equipment manufacturers and system designers across the globe, helping customers accelerate design cycles and manage the complexity of modern integrated systems.

The company’s offerings span software tools for digital, custom/analog and mixed-signal design, verification and signoff, as well as solutions for system-level modeling, thermal and signal integrity analysis, and PCB and package design.

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Every AI accelerator that lands in a hyperscaler data center starts as software running on tools from a small club of vendors. Cadence Design Systems (NASDAQ:CDNS | CDNS Price Prediction) sits at the center of that club, and the numbers show what the AI buildout is doing to its business.

An AI Chip Design Tollbooth Cadence’s Q1 FY2026 report, filed April 27, 2026, showed revenue of $1.474 billion, up 18.7% year over year, with non-GAAP EPS of $1.96 against a $1.89 consensus. Backlog hit a record $8.0 billion, with $4.0 billion expected to convert within twelve months. Management raised FY2026 revenue guidance to $6.125 billion to $6.225 billion.

CEO Anirudh Devgan framed the demand picture bluntly: "Cadence had a strong start to 2026 with accelerating AI demand and disciplined execution, delivering one of the best Q1s in the company’s history." On the mechanics of agentic AI expanding tool consumption, he added: "When an agent runs, it explores many more variations than a human would. For example, if a chip has 100 blocks, humans might run one or two experiments per block, but an agent may try 10 or 100 variations."

Powering NVIDIA’s Silicon NVIDIA (NASDAQ:NVDA) is the customer that best illustrates the flywheel. NVIDIA’s Q1 FY2027 revenue reached $81.615 billion, up 85.23% year over year, with Data Center revenue of $75.246 billion. Jensen Huang described the moment as "the largest infrastructure expansion in human history." Cadence expanded that relationship as well, with Devgan noting an "expanded partnership on AI and robotics with NVIDIA" spanning chip design, physical AI systems, and hyperscale AI factories.

The AI Investor Portfolio, run by Eric Bleeker, holds Cadence as an active recommendation, part of a broader thesis that "colleges aren’t going to be able to graduate 10 times as many designers for chips", forcing customers to lean on AI-augmented EDA software.

How It Stacks Up Against Synopsys The obvious peer is Synopsys (NASDAQ:SNPS), whose Q2 FY2026 revenue jumped 41.9% year over year, boosted by the ~$35 billion Ansys deal. Investor reception has diverged sharply this year. Cadence is up 19.37% year to date to $373.14, while Synopsys is down 6.93%.

Valuation is the counterweight. Cadence trades at a trailing P/E of 87 and forward P/E of 48, with analysts carrying an average target of $388.78 and 22 Buy or Strong Buy ratings against 3 Holds. With FY2026 guidance calling for Cadence to hit the "Rule of 60 for the first time," the AI-chip tollbooth thesis is showing up cleanly in the operating numbers.

Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Cadence Design Systems didn't make the cut. Grab the names FREE today.

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