Cadence Design Systems (CDNS - Free Report) ended the recent trading session at $284.11, demonstrating a -2.93% change from the preceding day's closing price. The stock's performance was behind the S&P 500's daily loss of 0.58%. At the same time, the Dow lost 1.18%, and the tech-heavy Nasdaq lost 0.32%.
The maker of hardware and software products for validating chip designs's shares have seen a decrease of 11.81% over the last month, not keeping up with the Computer and Technology sector's gain of 0.12% and the S&P 500's loss of 0.36%.
The upcoming earnings release of Cadence Design Systems will be of great interest to investors. In that report, analysts expect Cadence Design Systems to post earnings of $2.04 per share. This would mark year-over-year growth of 5.7%. Meanwhile, the latest consensus estimate predicts the revenue to be $1.61 billion, indicating a 20.23% increase compared to the same quarter of the previous year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $8.12 per share and revenue of $6.31 billion, indicating changes of +13.73% and +19.18%, respectively, compared to the previous year.
Investors should also note any recent changes to analyst estimates for Cadence Design Systems. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Currently, Cadence Design Systems is carrying a Zacks Rank of #3 (Hold).
In terms of valuation, Cadence Design Systems is presently being traded at a Forward P/E ratio of 36.04. For comparison, its industry has an average Forward P/E of 16.56, which means Cadence Design Systems is trading at a premium to the group.
We can also see that CDNS currently has a PEG ratio of 2.47. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The average PEG ratio for the Computer - Software industry stood at 1.54 at the close of the market yesterday.
The Computer - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 95, finds itself in the top 39% echelons of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?
Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Cadence Design Systems (CDNS - Free Report) .
Cadence currently has an average brokerage recommendation (ABR) of 1.39, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 23 brokerage firms. An ABR of 1.39 approximates between Strong Buy and Buy.
Of the 23 recommendations that derive the current ABR, 18 are Strong Buy and one is Buy. Strong Buy and Buy respectively account for 78.3% and 4.4% of all recommendations.
Brokerage Recommendation Trends for CDNS
Check price target & stock forecast for Cadence here>>>
While the ABR calls for buying Cadence, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.
Are you wondering why? The vested interest of brokerage firms in a stock they cover often results in a strong positive bias of their analysts in rating it. Our research shows that for every "Strong Sell" recommendation, brokerage firms assign five "Strong Buy" recommendations.
This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.
With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near-term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision.
ABR Should Not Be Confused With Zacks RankAlthough both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether.
Broker recommendations are the sole basis for calculating the ABR, which is typically displayed in decimals (such as 1.28). The Zacks Rank, on the other hand, is a quantitative model designed to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.
In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.
In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks.
Another key difference between the ABR and Zacks Rank is freshness. The ABR is not necessarily up-to-date when you look at it. But, since brokerage analysts keep revising their earnings estimates to account for a company's changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in indicating future price movements.
Is CDNS a Good Investment?In terms of earnings estimate revisions for Cadence, the Zacks Consensus Estimate for the current year has remained unchanged over the past month at $8.12.
Analysts' steady views regarding the company's earnings prospects, as indicated by an unchanged consensus estimate, could be a legitimate reason for the stock to perform in line with the broader market in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Cadence. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
It may therefore be prudent to be a little cautious with the Buy-equivalent ABR for Cadence.
Greenland Capital Management LP cut its stake in shares of Cadence Design Systems, Inc. (NASDAQ:CDNS – Free Report) by 68.8% in the 2nd quarter, according to its most recent filing with the Securities & Exchange Commission. The firm owned 2,625 shares of the software maker’s stock after selling 5,780 shares during the period. Greenland Capital Management LP’s holdings in Cadence Design Systems were worth $985,000 as of its most recent SEC filing.
Other institutional investors and hedge funds have also made changes to their positions in the company. George Kaiser Family Foundation purchased a new position in Cadence Design Systems in the second quarter valued at approximately $725,000. MUFG Securities EMEA plc lifted its position in Cadence Design Systems by 113.9% during the fourth quarter. MUFG Securities EMEA plc now owns 11,159 shares of the software maker’s stock valued at $3,488,000 after buying an additional 5,943 shares in the last quarter. Leonteq Securities AG purchased a new stake in Cadence Design Systems during the fourth quarter worth approximately $1,105,000. PNC Financial Services Group Inc. grew its stake in Cadence Design Systems by 1.0% during the fourth quarter. PNC Financial Services Group Inc. now owns 369,717 shares of the software maker’s stock worth $115,566,000 after buying an additional 3,562 shares during the period. Finally, Vega Investment Solutions acquired a new stake in shares of Cadence Design Systems in the second quarter worth $1,957,000. 84.85% of the stock is currently owned by institutional investors and hedge funds.
Insider Activity In other Cadence Design Systems news, VP Paul Scannell sold 280 shares of the company’s stock in a transaction dated Wednesday, August 26th. The shares were sold at an average price of $339.00, for a total value of $94,920.00. Following the completion of the transaction, the vice president directly owned 31,720 shares of the company’s stock, valued at $10,753,080. This represents a 0.88% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Ita Brennan sold 180 shares of the firm’s stock in a transaction dated Wednesday, June 10th. The shares were sold at an average price of $387.45, for a total value of $69,741.00. Following the sale, the director owned 8,004 shares of the company’s stock, valued at $3,101,149.80. This represents a 2.20% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 7,221 shares of company stock worth $2,570,606 over the last three months. 0.49% of the stock is currently owned by corporate insiders.
Wall Street Analyst Weigh In CDNS has been the topic of a number of research reports. Rosenblatt Securities raised their target price on shares of Cadence Design Systems from $410.00 to $420.00 and gave the company a “buy” rating in a research note on Tuesday, July 28th. Wall Street Zen raised shares of Cadence Design Systems from a “hold” rating to a “buy” rating in a research report on Saturday, August 1st. Robert W. Baird increased their price target on Cadence Design Systems from $415.00 to $420.00 and gave the company an “outperform” rating in a report on Tuesday, July 28th. Citigroup raised their price objective on Cadence Design Systems from $400.00 to $420.00 and gave the company a “buy” rating in a research report on Tuesday, July 28th. Finally, Piper Sandler boosted their price objective on Cadence Design Systems from $325.00 to $349.00 and gave the stock a “neutral” rating in a research note on Tuesday, July 28th. Thirteen equities research analysts have rated the stock with a Buy rating and three have issued a Hold rating to the company’s stock. Based on data from MarketBeat.com, Cadence Design Systems has a consensus rating of “Moderate Buy” and a consensus target price of $405.69. Read Our Latest Analysis on Cadence Design Systems
Cadence Design Systems Price Performance Shares of NASDAQ:CDNS opened at $292.70 on Monday. The company has a market capitalization of $80.61 billion, a price-to-earnings ratio of 58.19, a price-to-earnings-growth ratio of 3.14 and a beta of 1.14. The company has a 50 day moving average of $341.57 and a two-hundred day moving average of $334.06. Cadence Design Systems, Inc. has a 52-week low of $262.75 and a 52-week high of $416.69. The company has a quick ratio of 1.53, a current ratio of 1.74 and a debt-to-equity ratio of 0.36.
Cadence Design Systems (NASDAQ:CDNS – Get Free Report) last posted its earnings results on Monday, July 27th. The software maker reported $2.11 EPS for the quarter, topping analysts’ consensus estimates of $2.05 by $0.06. The business had revenue of $1.58 billion for the quarter, compared to analysts’ expectations of $1.58 billion. Cadence Design Systems had a net margin of 23.60% and a return on equity of 27.98%. The business’s revenue for the quarter was up 24.2% compared to the same quarter last year. During the same period in the previous year, the company posted $1.65 earnings per share. Cadence Design Systems has set its FY 2026 guidance at 8.050-8.150 EPS and its Q3 2026 guidance at 2.010-2.070 EPS. As a group, analysts forecast that Cadence Design Systems, Inc. will post 6.4 earnings per share for the current fiscal year.
(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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California State Teachers Retirement System lifted its position in Cadence Design Systems, Inc. (NASDAQ:CDNS – Free Report) by 37,856.6% during the second quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The fund owned 154,968,502 shares of the software maker’s stock after acquiring an additional 154,560,224 shares during the period. California State Teachers Retirement System owned 56.27% of Cadence Design Systems worth $58,162,778,000 as of its most recent filing with the Securities and Exchange Commission (SEC).
Several other large investors have also recently made changes to their positions in CDNS. Avalon Trust Co purchased a new position in Cadence Design Systems in the 2nd quarter valued at $30,000. Fiduciary Financial Advisors purchased a new stake in shares of Cadence Design Systems during the second quarter worth $31,000. University of Texas Texas AM Investment Management Co. acquired a new stake in shares of Cadence Design Systems in the fourth quarter valued at about $28,000. Arlington Trust Co LLC lifted its stake in shares of Cadence Design Systems by 154.3% in the second quarter. Arlington Trust Co LLC now owns 89 shares of the software maker’s stock worth $33,000 after buying an additional 54 shares in the last quarter. Finally, Imprint Wealth LLC acquired a new position in Cadence Design Systems during the third quarter worth about $31,000. 84.85% of the stock is currently owned by hedge funds and other institutional investors.
Analysts Set New Price Targets A number of analysts have commented on CDNS shares. Wall Street Zen upgraded shares of Cadence Design Systems from a “hold” rating to a “buy” rating in a report on Saturday, August 1st. Weiss Ratings upgraded Cadence Design Systems from a “hold (c)” rating to a “hold (c+)” rating in a report on Thursday, July 30th. Rosenblatt Securities upped their price target on Cadence Design Systems from $410.00 to $420.00 and gave the company a “buy” rating in a research report on Tuesday, July 28th. Wells Fargo & Company increased their price target on Cadence Design Systems from $400.00 to $425.00 and gave the company an “overweight” rating in a report on Tuesday, May 26th. Finally, Morgan Stanley reiterated an “overweight” rating and set a $400.00 price objective on shares of Cadence Design Systems in a research report on Wednesday, July 29th. Thirteen research analysts have rated the stock with a Buy rating and three have assigned a Hold rating to the company’s stock. Based on data from MarketBeat, Cadence Design Systems presently has an average rating of “Moderate Buy” and an average target price of $405.69.
Check Out Our Latest Report on Cadence Design Systems Insider Activity at Cadence Design Systems In other news, VP Paul Cunningham sold 2,000 shares of the stock in a transaction on Monday, August 17th. The stock was sold at an average price of $323.32, for a total transaction of $646,640.00. Following the completion of the transaction, the vice president directly owned 124,586 shares in the company, valued at approximately $40,281,145.52. This represents a 1.58% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Albert Sangiovanni-Vincentelli sold 1,250 shares of the firm’s stock in a transaction dated Tuesday, August 25th. The stock was sold at an average price of $320.88, for a total value of $401,100.00. Following the sale, the director directly owned 40,794 shares of the company’s stock, valued at $13,089,978.72. The trade was a 2.97% decrease in their ownership of the stock. 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. Insiders have sold 7,221 shares of company stock valued at $2,570,606 over the last 90 days. Corporate insiders own 0.49% of the company’s stock.
Cadence Design Systems Stock Performance NASDAQ:CDNS opened at $292.70 on Monday. The company’s 50-day moving average is $341.57 and its two-hundred day moving average is $334.06. Cadence Design Systems, Inc. has a 1-year low of $262.75 and a 1-year high of $416.69. The company has a debt-to-equity ratio of 0.36, a current ratio of 1.74 and a quick ratio of 1.53. The firm has a market capitalization of $80.61 billion, a price-to-earnings ratio of 58.19, a PEG ratio of 3.14 and a beta of 1.14.
Cadence Design Systems (NASDAQ:CDNS – Get Free Report) last announced its quarterly earnings results on Monday, July 27th. The software maker reported $2.11 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $2.05 by $0.06. Cadence Design Systems had a net margin of 23.60% and a return on equity of 27.98%. The business had revenue of $1.58 billion during the quarter, compared to the consensus estimate of $1.58 billion. During the same quarter last year, the firm earned $1.65 EPS. The business’s revenue was up 24.2% compared to the same quarter last year. Cadence Design Systems has set its FY 2026 guidance at 8.050-8.150 EPS and its Q3 2026 guidance at 2.010-2.070 EPS. Analysts forecast that Cadence Design Systems, Inc. will post 6.4 EPS for the current year.
Cadence Design Systems Company Profile (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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B. Metzler seel. Sohn & Co. AG boosted its position in Cadence Design Systems, Inc. (NASDAQ:CDNS – Free Report) by 20.9% during the 2nd quarter, according to its most recent 13F filing with the Securities and Exchange Commission (SEC). The institutional investor owned 24,037 shares of the software maker’s stock after purchasing an additional 4,163 shares during the quarter. B. Metzler seel. Sohn & Co. AG’s holdings in Cadence Design Systems were worth $9,022,000 as of its most recent filing with the Securities and Exchange Commission (SEC).
Several other large investors have also recently bought and sold shares of CDNS. Whipplewood Advisors LLC grew its position in Cadence Design Systems by 933.3% during the first quarter. Whipplewood Advisors LLC now owns 93 shares of the software maker’s stock worth $26,000 after buying an additional 84 shares in the last quarter. Brown Lisle Cummings Inc. increased its stake in Cadence Design Systems by 860.0% in the 1st quarter. Brown Lisle Cummings Inc. now owns 96 shares of the software maker’s stock worth $27,000 after acquiring an additional 86 shares during the last quarter. University of Texas Texas AM Investment Management Co. purchased a new stake in shares of Cadence Design Systems in the 4th quarter valued at about $28,000. Swiss RE Ltd. purchased a new stake in shares of Cadence Design Systems in the 4th quarter valued at about $29,000. Finally, Avalon Trust Co bought a new stake in shares of Cadence Design Systems during the 2nd quarter valued at about $30,000. 84.85% of the stock is owned by institutional investors.
Cadence Design Systems Stock Performance NASDAQ:CDNS opened at $306.67 on Thursday. The business has a 50 day moving average of $344.53 and a 200 day moving average of $334.07. The company has a market capitalization of $84.45 billion, a price-to-earnings ratio of 60.97, a PEG ratio of 3.36 and a beta of 1.14. Cadence Design Systems, Inc. has a 1-year low of $262.75 and a 1-year high of $416.69. The company has a debt-to-equity ratio of 0.36, a current ratio of 1.74 and a quick ratio of 1.53.
Cadence Design Systems (NASDAQ:CDNS – Get Free Report) last issued its earnings results on Monday, July 27th. The software maker reported $2.11 earnings per share (EPS) for the quarter, topping the consensus estimate of $2.05 by $0.06. The business had revenue of $1.58 billion during the quarter, compared to analyst estimates of $1.58 billion. Cadence Design Systems had a return on equity of 27.98% and a net margin of 23.60%.Cadence Design Systems’s revenue for the quarter was up 24.2% on a year-over-year basis. During the same quarter in the prior year, the firm earned $1.65 earnings per share. Cadence Design Systems has set its FY 2026 guidance at 8.050-8.150 EPS and its Q3 2026 guidance at 2.010-2.070 EPS. On average, sell-side analysts predict that Cadence Design Systems, Inc. will post 6.4 earnings per share for the current fiscal year. Analyst Ratings Changes Several brokerages have recently commented on CDNS. Piper Sandler boosted their price objective on Cadence Design Systems from $325.00 to $349.00 and gave the stock a “neutral” rating in a report on Tuesday, July 28th. Benchmark reaffirmed a “buy” rating on shares of Cadence Design Systems in a research note on Tuesday, July 28th. KeyCorp reiterated an “overweight” rating on shares of Cadence Design Systems in a research report on Tuesday, July 28th. Weiss Ratings raised shares of Cadence Design Systems from a “hold (c)” rating to a “hold (c+)” rating in a research note on Thursday, July 30th. Finally, Wall Street Zen raised shares of Cadence Design Systems from a “hold” rating to a “buy” rating in a report on Saturday, August 1st. Thirteen investment analysts have rated the stock with a Buy rating and three have given a Hold rating to the company’s stock. Based on data from MarketBeat.com, the stock currently has an average rating of “Moderate Buy” and a consensus price target of $405.69.
Read Our Latest Stock Analysis on Cadence Design Systems
Insider Buying and Selling at Cadence Design Systems In other news, Director Ita M. Brennan sold 180 shares of Cadence Design Systems stock in a transaction dated Wednesday, June 10th. The stock was sold at an average price of $387.45, for a total value of $69,741.00. Following the transaction, the director owned 8,004 shares in the company, valued at approximately $3,101,149.80. The trade was a 2.20% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, VP Paul Cunningham sold 2,000 shares of the business’s stock in a transaction dated Monday, August 17th. The shares were sold at an average price of $323.32, for a total value of $646,640.00. Following the completion of the sale, the vice president directly owned 124,586 shares of the company’s stock, valued at approximately $40,281,145.52. This trade represents a 1.58% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last quarter, insiders sold 7,221 shares of company stock valued at $2,570,606. 0.49% of the stock is currently owned by insiders.
(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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Complete x8 subsystem solution in TSMC N3 process demonstrates industry readiness for mass production and de-risks adoption for AI/HPC customers
SAN JOSE, Calif.--(BUSINESS WIRE)--Cadence (Nasdaq: CDNS) today announced that its PHY and controller IP for the PCI Express® (PCIe®) 6.0 specification, implemented in the TSMC N3 process, achieved first-pass success at the recent PCI-SIG® compliance workshop held in late July. The workshop marked the industry’s first official event for PCIe 6.0 specification compliance testing, with Cadence’s x8 subsystem solution tested at the full PCIe 6.0 specification speed of 64 GT/s.
The complete Cadence subsystem solution, comprising both PHY and controller, successfully passed all official PCIe 6.0 compliance specification tests and is on PCI-SIG’s Integrators List.
Share The complete Cadence subsystem solution, comprising both PHY and controller, successfully passed all official PCIe 6.0 compliance specification tests and is on PCI-SIG’s Integrators List.
“PCI Express is a crucial scale-up interconnect for AI/HPC data centers and AI factories, and Cadence’s subsystem for the PCIe 6.0 specification delivers best-in-class performance with among the lowest power in the industry,” said Marc Loinaz, vice president of research and development for high-performance PHY, Silicon Solutions Group at Cadence. “This first-pass compliance success validates our complete PHY and controller solution and gives customers confidence that our technology is fully interoperable and ready for production.”
The milestone underscores the importance of early ecosystem collaboration in bringing new standards to market. Cadence worked closely with PCI-SIG, test equipment providers, and industry partners in the months leading up to the official compliance workshop, conducting interoperability testing to identify and resolve potential issues before the formal evaluation.
“As PCIe 6.0 technology enables the next wave of AI and high-performance computing systems, rigorous compliance and interoperability testing are essential for ecosystem success,” said Brig Asay, General Manager, Network Data Center, Keysight Technologies. “Cadence’s first-pass compliance achievement reflects both the quality of its PCIe 6.0 subsystem implementation and the effectiveness of comprehensive validation using Keysight’s test and measurement solutions. We are pleased to support industry leaders in accelerating PCIe 6.0 technology deployment with confidence.”
“Cadence is a long-standing PCI-SIG member helping to further PCIe technology adoption,” said Al Yanes, president and chairperson of PCI-SIG. “Cadence’s PCIe 6.0 compliance milestone plays a role in the continued advancement of PCIe technology architecture.”
PCIe 6.0 technology addresses growing demand for high-bandwidth connectivity in AI and high-performance computing systems, where the standard is used for accelerator cards, network interfaces, and storage devices. The interface is expected to see wide adoption in data center and AI infrastructure, with broader deployment in automotive and enterprise systems following as the ecosystem matures.
“Positron AI has licensed Cadence’s SerDes IP for the PCIe 6.0 specification for our AI inference accelerator chip,” said Thomas Sohmers, CTO at Positron AI. “Cadence’s complete PCIe 6.0 subsystem built in silicon and robust interoperability testing give us confidence that our PCIe 6.0 interface will meet the high-bandwidth connectivity demands of our transformer workloads.”
Key features of Cadence’s PCIe 6.0 technology solution include:
Complete subsystem solution with PHY and controller built in silicon ADC and DSP-based equalization Firmware-optimized SerDes operation Multi-protocol flexibility and support Optimized for low power, including support for the latest PCI-SIG engineering change notices (ECNs) Certification for x8 configuration on TSMC N3 process PCI-SIG has continued to advance the PCIe standard to meet the needs of advanced HPC and AI workloads. Cadence offers a broad portfolio of PCIe technology solutions up to the PCIe 7.0 specification.
Cadence’s complete subsystem solution for PCIe 6.0 technology, including PHY and controller, is available now for SoC providers to design in. For more information on Cadence IP for PCIe 6.0 technology, visit the Cadence PCIe 6.0 and CXL PHY product page or download the Design IP brochure.
About Cadence
Cadence is a market leader in AI and digital twins, pioneering the application of computational software to accelerate innovation in the engineering design of silicon to systems. Our design solutions, based on Cadence’s Intelligent System Design™ strategy, are essential for the world’s leading semiconductor and systems companies to build their next-generation products from chips to full electromechanical systems that serve a wide range of markets, including hyperscale computing, mobile communications, automotive, aerospace, industrial, life sciences and robotics. In 2025, Cadence was recognized by Fortune as one of the world’s top 100 best companies to work for. Cadence solutions offer limitless opportunities.
Cadence Design Systems (CDNS - Free Report) ended the recent trading session at $313.04, demonstrating a -7.6% change from the preceding day's closing price. This change lagged the S&P 500's 0.71% loss on the day. Elsewhere, the Dow saw a downswing of 0.79%, while the tech-heavy Nasdaq depreciated by 1.03%.
The maker of hardware and software products for validating chip designs's shares have seen an increase of 0.78% over the last month, not keeping up with the Computer and Technology sector's gain of 4.69% and the S&P 500's gain of 2.72%.
Market participants will be closely following the financial results of Cadence Design Systems in its upcoming release. The company is expected to report EPS of $2.04, up 5.7% from the prior-year quarter. In the meantime, our current consensus estimate forecasts the revenue to be $1.61 billion, indicating a 20.23% growth compared to the corresponding quarter of the prior year.
CDNS's full-year Zacks Consensus Estimates are calling for earnings of $8.12 per share and revenue of $6.31 billion. These results would represent year-over-year changes of +13.73% and +19.18%, respectively.
Investors should also pay attention to any latest changes in analyst estimates for Cadence Design Systems. These revisions typically reflect the latest short-term business trends, which can change frequently. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.02% lower. As of now, Cadence Design Systems holds a Zacks Rank of #3 (Hold).
In terms of valuation, Cadence Design Systems is currently trading at a Forward P/E ratio of 41.72. This represents a premium compared to its industry average Forward P/E of 17.95.
Meanwhile, CDNS's PEG ratio is currently 2.86. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The average PEG ratio for the Computer - Software industry stood at 1.63 at the close of the market yesterday.
The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 85, putting it in the top 35% of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.
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Index S&P 500 -0,71 % na 7631,54 b. Nejsilnější sektory S&P Změna Nejslabší sektory S&P Změna Energie +1,5 % Zbytná spotřeba -1,9 % Utility +0,8 % Průmysl -1,4 % Zdravotní péče +0,7 % Základní materiály -1,4 % Nejsilnější akcie S&P Změna Nejslabší akcie S&P Změna Moderna (MRNA) +9,9 % Axon Enterprise (AXON) -8,5 % Edison International (EIX) +8,9 % Cadence Design Systems (CDNS) -7,6 % PG&E Corp (PCG) +6,0 % Interactive Brokers Group (IBKR) -7,1 % HP (HPQ) +4,3 % Crowdstrike Holdings (CRWD) -6,9 % CF Industries Holdings (CF) +4,3 % Dell Technologies (DELL) -6,9 %
David Lamač
Fio banka, a.s.
Prohlášení
Cadence Subsystem for PCIe 6.0 Architecture Achieves First-Pass PCI Express Specification Compliance Cadence (Nasdaq: CDNS) today announced that its PHY and controller IP for the PCI Express® (PCIe®) 6.0 specification, implemented in the TSMC N3 process, achieved first-pass success at the recent PCI-SIG® compliance workshop held in late July. The workshop marked the industry’s first official event for PCIe 6.0 specification compliance testing, with Cadence’s x8 subsystem solution tested at the full PCIe 6.0 specification speed of 64 GT/s.
The complete Cadence subsystem solution, comprising both PHY and controller, successfully passed all official PCIe 6.0 compliance specification tests and is on PCI-SIG’s Integrators List.
“PCI Express is a crucial scale-up interconnect for AI/HPC data centers and AI factories, and Cadence’s subsystem for the PCIe 6.0 specification delivers best-in-class performance with among the lowest power in the industry,” said Marc Loinaz, vice president of research and development for high-performance PHY, Silicon Solutions Group at Cadence. “This first-pass compliance success validates our complete PHY and controller solution and gives customers confidence that our technology is fully interoperable and ready for production.”
The milestone underscores the importance of early ecosystem collaboration in bringing new standards to market. Cadence worked closely with PCI-SIG, test equipment providers, and industry partners in the months leading up to the official compliance workshop, conducting interoperability testing to identify and resolve potential issues before the formal evaluation.
“As PCIe 6.0 technology enables the next wave of AI and high-performance computing systems, rigorous compliance and interoperability testing are essential for ecosystem success,” said Brig Asay, General Manager, Network Data Center, Keysight Technologies. “Cadence’s first-pass compliance achievement reflects both the quality of its PCIe 6.0 subsystem implementation and the effectiveness of comprehensive validation using Keysight’s test and measurement solutions. We are pleased to support industry leaders in accelerating PCIe 6.0 technology deployment with confidence.”
“Cadence is a long-standing PCI-SIG member helping to further PCIe technology adoption,” said Al Yanes, president and chairperson of PCI-SIG. “Cadence’s PCIe 6.0 compliance milestone plays a role in the continued advancement of PCIe technology architecture.”
PCIe 6.0 technology addresses growing demand for high-bandwidth connectivity in AI and high-performance computing systems, where the standard is used for accelerator cards, network interfaces, and storage devices. The interface is expected to see wide adoption in data center and AI infrastructure, with broader deployment in automotive and enterprise systems following as the ecosystem matures.
“Positron AI has licensed Cadence’s SerDes IP for the PCIe 6.0 specification for our AI inference accelerator chip,” said Thomas Sohmers, CTO at Positron AI. “Cadence’s complete PCIe 6.0 subsystem built in silicon and robust interoperability testing give us confidence that our PCIe 6.0 interface will meet the high-bandwidth connectivity demands of our transformer workloads.”
Key features of Cadence’s PCIe 6.0 technology solution include:
Complete subsystem solution with PHY and controller built in siliconADC and DSP-based equalizationFirmware-optimized SerDes operationMulti-protocol flexibility and supportOptimized for low power, including support for the latest PCI-SIG engineering change notices (ECNs)Certification for x8 configuration on TSMC N3 processPCI-SIG has continued to advance the PCIe standard to meet the needs of advanced HPC and AI workloads. Cadence offers a broad portfolio of PCIe technology solutions up to the PCIe 7.0 specification.
Cadence’s complete subsystem solution for PCIe 6.0 technology, including PHY and controller, is available now for SoC providers to design in. For more information on Cadence IP for PCIe 6.0 technology, visit the Cadence PCIe 6.0 and CXL PHY product page or download the Design IP brochure.
About Cadence
Cadence is a market leader in AI and digital twins, pioneering the application of computational software to accelerate innovation in the engineering design of silicon to systems. Our design solutions, based on Cadence’s Intelligent System Design™ strategy, are essential for the world’s leading semiconductor and systems companies to build their next-generation products from chips to full electromechanical systems that serve a wide range of markets, including hyperscale computing, mobile communications, automotive, aerospace, industrial, life sciences and robotics. In 2025, Cadence was recognized by Fortune as one of the world’s top 100 best companies to work for. Cadence solutions offer limitless opportunities.
PCI-SIG, PCI Express, and PCIe are trademarks or registered trademarks of PCI-SIG. All other trademarks are the property of their respective owners.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260901910079/en/
Disclosures I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.
A global bond selloff sent long-term yields surging to levels not seen in over a year, and the chips sector is bearing the brunt as traders reprice the market's most ambitious AI growth bets.
Semiconductor stocks are falling at Tuesday’s open as a global bond selloff drives long-term yields higher and forces a rethink of the market’s highest-multiple corners. The catalyst is macro rather than company-specific, and AI-linked growth names carry the most valuation exposure to a repricing of discount rates.
The iShares Semiconductor ETF (NASDAQ:SOXX) is down 2% to $500.95, and the Invesco QQQ Trust (NASDAQ:QQQ) is down 1% to $708.08. Chips are falling harder than large-cap technology as a whole, which fits a session where duration risk is doing the work.
Intel (NASDAQ:INTC | INTC Price Prediction) stock is down 3% to $86.68, leading the group lower. Meanwhile, Advanced Micro Devices (NASDAQ:AMD) stock is down 2% to $460.52, giving back some of the summer’s advance. NVIDIA (NASDAQ:NVDA) stock is down 2% to $217.18 in early trading, and Broadcom (NASDAQ:AVGO) stock is down 1% to $364.81.
Rate Shock, Not a Chip Story The 10-year Treasury note yield is at 4.8%, up 0.6% over the past 24 hours. That reading sits above the highest level of the past year, which was 4.8% on July 31. A higher long-term yield lowers the present value of distant cash flows, so the derating falls heaviest on stocks whose valuations rest on growth several years out.
Global sovereign borrowing costs tell the same story. Reuters reported that global bond markets are putting governments on notice over fiscal and inflation risks, and InvestmentNews reported that the global bond selloff has driven government borrowing costs to multi-decade highs. The New York Times reported on September 1 that the selloff has investors on edge, and the Australian Broadcasting Corporation described a once-in-a-generation Australian bond selloff.
Oil is the second issue on traders’ minds today. Reuters reported on September 1 that oil is rising as renewed U.S.-Iran strikes stoke supply fears, with Brent crude past $91 and the Strait of Hormuz reported shut. Higher energy costs feed the same inflation channel that’s pushing yields up, tightening the macro backdrop for growth stocks.
Winners Wear the Biggest Target Year-to-date performance through Monday’s close explains why Intel and AMD are leading the way down. Intel stock is up 143% for the year and AMD stock is up 120%. Those are by far the largest accumulated gains in the group, so they carry the most profit exposed to a rates-driven multiple reset.
The contrast holds up across the rest of the roster. NVIDIA stock is up 19% year to date, Broadcom stock is up 7%, the iShares Semiconductor ETF is up 70%, and the Invesco QQQ Trust is up 17%. Broadcom’s much smaller advance leaves it less momentum to unwind, which fits its shallower move this morning.
Higher discount rates compress long-duration cash flow multiples faster than they change near-term earnings. Semiconductors have become the market’s premier long-duration bet on AI (we profiled seven non-chipmaker suppliers powering that same buildout in a free report), so when rates back up sharply, the group’s valuation math tightens fastest and the year’s biggest winners feel it first.
What to Watch Investors can watch for signs that the 10-year yield stabilizes below its overnight peak, since a pullback in yields tends to relieve pressure on the highest-multiple names first. The VIX closed at 14.43 on August 28, suggesting broad-market fear isn’t driving this move and that the selling is concentrated where the accumulated gains sit.
Traders may want to keep an eye on whether dip-buyers step in around Intel’s morning low and whether AMD holds its rising short-term trend. A shallow bounce in Broadcom would reinforce the differentiation thesis. Meanwhile, a deeper leg down in NVIDIA would suggest the derating is broadening beyond the year-to-date leaders.
Position sizing should reflect the setup. With Intel and AMD sitting on triple-digit year-to-date gains and yields at multi-year highs, trimming into strength rather than adding on weakness fits the risk picture. This is a rates-driven session, and the market can turn as quickly as the bond market does.
Contact [email protected] for any questions or corrections.
@ProsperTradingAcademy's Mike Shorr highlight three stocks he sees holding plenty of trading opportunities ahead. He points to Cadence Design Systems (CDNS) gaining momentum, sees Cloudflare (NET) on the "top level" of the cybersecurity sector, and Walmart (WMT) as a "bottom feeder" opportunity.
Key Takeaways Cadence generated $582 million in second-quarter free cash flow and repurchased $200 million of shares.Cadence expects $2 billion in 2026 operating cash flow and plans to use about 50% of FCF for buybacks.Cadence is investing in AI, M&A and go-to-market capabilities while remaining an asset-light business. Cadence Design Systems (CDNS - Free Report) appears well-positioned to balance growth investments with shareholder returns, buoyed by strong cash flow generation.
In the second quarter of 2026, Cadence generated an operating cash flow of $635 million compared with the prior quarter’s $356 million. Free cash flow was $582 million compared with $307 million in the previous quarter. As of June 30, 2026, cash and cash equivalents stood at $1.44 billion while long-term debt was $2.482 billion.
The company repurchased its shares worth $200 million in the second quarter. For 2026, operating cash flow is expected to be $2 billion compared with $1.875 billion to $1.975 billion projected earlier. The company expects to utilize roughly 50% of its free cash flow to repurchase shares in 2026.
The key question is whether this level of cash generation can remain sufficient as Cadence steps up spending on strategic opportunities.
These investments are aimed at strengthening the company’s technology portfolio and go-to-market capabilities. The company also does not expect Agentic AI to require a massive increase in capital intensity. Cadence remains an asset-light business.
Cadence expects acquisition profitability and IP profitability to improve as it moves into 2027. The company also pursues strategic M&A to supplement organic growth. In February 2026, Cadence acquired the Design & Engineering division of Hexagon AB, including its MSC Software business, in a deal worth €2.7 billion. The buyout will extend its presence in the multi-billion-dollar structural analysis market.
Cadence is a well-known name in the electronic system design space. The company is witnessing broad-based demand for its solutions, especially the AI-driven portfolio, amid increasing design complexity. Given strong demand trends, management raised 2026 revenue guidance to $6.26-$6.34 billion from $6.125-$6.225 billion previously. It also continues to expect roughly 80% recurring revenue.
Nonetheless, volatile global macroeconomic conditions and substantial exposure to the semiconductor vertical are concerning for CDNS. Stiff competition from players such as Synopsys (SNPS - Free Report) and Keysight Technologies (KEYS - Free Report) remains concerning.
Mapping the Competitive TerrainSynopsys is one of the closest competitors for CDNS in the EDA space. The company generated $746 million in third-quarter free cash flow. SNPS raised its cash flow from operations guidance to approximately $2.8 billion (up $500 million) on strong cash collections while reducing capex guidance to $225 million. This will result in free cash flow of roughly $2.6 billion, an increase of $600 million compared with the previous guidance. The company did not repurchase shares in the third quarter of fiscal 2026.
Synopsys ended the third quarter with $3.6 billion in cash and short-term investments.
Keysight Technologies is a provider of electronic design and test instrumentation systems. In the third quarter of fiscal 2026, Keysight Technologies generated $403 million in free cash flow and repurchased $210 million of shares, taking year-to-date buybacks to $517 million. As of July 31, 2026, the company had $2.61 billion in cash and cash equivalents and $1.82 billion of long-term debt. The company is simultaneously investing ahead of opportunities in AI infrastructure, 6G and advanced semiconductors.
For the fourth quarter of fiscal 2026, Keysight Technologies expects revenues in the range of $1.93-$1.95 billion.
CDNS Price Performance, Valuation and EstimatesShares of CDNS have edged up 1.3% in the past month compared with the Computer Software industry’s growth of 6.4%.
Image Source: Zacks Investment Research
CDNS trades at a forward 12-month price-to-earnings (P/E) ratio of 37.9X, below the industry’s 24.02X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CDNS’ earnings for 2026 has been revised upward over the past 60 days.
Image Source: Zacks Investment Research
CDNS currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
On August 25, 2026, we delve into the DCF analysis for Cadence Design Systems Inc CDNS, a company that has seen varied price performance recently, including a 1-year decline of 9.6%. Below are key insights from our valuation analysis:
DCF Earnings-based intrinsic value of $249.69 vs current price of $315.92 (margin of safety: -26.5%) DCF Free Cash Flow-based intrinsic value of $167.64 (second opinion suggests significant overvaluation) GF Score™ of 98/100 indicates strong reliability of the DCF inputs What Is CDNS Worth? DCF Earnings-Based Model The DCF earnings-based model utilizes a two-stage approach to assess the intrinsic value of CDNS. The first stage accounts for robust growth in earnings, while the second stage reflects a more conservative terminal growth rate.
Parameter Value Current EPS (TTM, excl. non-recurring) $7.99 10-Year Growth Rate 21.9% 10-Year Treasury Rate 4.67% Discount Rate (ceil(Treasury) + 6%) 11% Terminal Growth Rate 4% In the first stage (Years 1-10), we project EPS growth at 21.9% per year, discounted at 11%. In the second stage (Years 11-20), we assume a terminal growth rate of 4%, also discounted at 11%. The calculation summary is as follows:
Stage Description Value Growth Stage (Years 1-10) EPS growing at 21.9%, discounted at 11% $122.05 Terminal Stage (Years 11-20) 4% terminal growth, discounted at 11% $127.64 Intrinsic Value Growth + Terminal $249.69 With the current price at $315.92, the intrinsic value of $249.69 indicates that the stock is modestly overvalued, with a margin of safety of -26.5%. Notably, GuruFocus employs EPS without non-recurring items as research indicates that stock prices correlate more closely with earnings than free cash flow. For further details, visit the CDNS DCF Calculator.
What Does the Free Cash Flow DCF Say? The Free Cash Flow (FCF) based intrinsic value for CDNS is calculated at $167.64. This figure starkly contrasts with the earnings-based valuation, indicating a significant disagreement between the two models. The FCF model suggests that the stock is significantly overvalued, with a margin of safety of -88.5%.
How Does GF Value™ Compare to the DCF Models? In addition to the DCF models, the GF Value™ for CDNS stands at $393.27, providing a third perspective on valuation. GF Value™ is GuruFocus' proprietary measure derived from historical trading multiples, past business growth, and future performance estimates. The divergence among the three models—DCF earnings, DCF FCF, and GF Value™—highlights the complexity of valuing CDNS. For more insights, check the GF Value™.
What Does CDNS's GF Score™ Tell Us? The GF Score™ evaluates a stock's overall quality based on several factors, including financial strength, profitability, and growth potential. CDNS boasts a GF Score™ of 98/100, indicating exceptional quality and reliability of the DCF inputs. The predictability rank of 3/5 stars suggests that while the DCF model is reasonably reliable, it is not without its limitations.
Key Assumptions and Limitations It is crucial to recognize that DCF models are highly sensitive to the assumptions made regarding growth rates and discount rates. Additionally, stocks with lower predictability ratings tend to yield less reliable DCF estimates. The terminal growth rate of 4% is a simplifying assumption that may not fully capture future performance.
What This Means for Investors In synthesizing the three valuation models—DCF earnings, DCF FCF, and GF Value™—we find a notable tension. The earnings-based model suggests modest overvaluation, while the FCF model indicates significant overvaluation. The GF Value™ provides a more optimistic perspective, suggesting potential undervaluation. The guru ownership signal, with 14 gurus currently holding the stock and a mix of adding and trimming positions, alongside insider selling of $103.8M over the past 12 months, adds complexity to the valuation narrative. This mixed signal suggests caution for potential investors. For a deeper dive into the analysis, visit the CDNS DCF Calculator.
Frequently Asked Questions What is CDNS's intrinsic value based on DCF?
According to our analysis, the earnings-based intrinsic value is $249.69, while the FCF-based intrinsic value is $167.64.
Is CDNS overvalued or undervalued?
Based on the DCF earnings model and GF Value™, CDNS appears to be overvalued, while the GF Value™ suggests a potential undervaluation.
How reliable is the DCF model for CDNS?
The predictability rank of 3/5 indicates that the DCF model is reasonably reliable, though it may not capture all future uncertainties.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
Disclosures I/We may personally own shares in some of the companies mentioned above. However, those positions are not material to either the company or to my/our portfolios.
Key Takeaways Cadence posted 24% revenue growth and a record $8.1 billion backlog in Q2 2026.Agentic AI is expanding design exploration, with early customer gains of 2x to more than 40x.Cadence raised 2026 guidance as AI and HPC demand drives broad-based growth across all product groups. Cadence Design Systems, Inc. (CDNS - Free Report) is benefiting from accelerating design activity as AI drives greater design complexity and creates demand for new system architectures across hyperscaler infrastructure and physical AI. The company delivered strong second-quarter 2026 results, with revenue rising 24% year over year to $1.584 billion and record backlog reaching $8.1 billion. On the last earnings call, management highlighted growing demand for AI-driven solutions across its expanding customer base, supported by both design for AI and AI for design.
Agentic AI is emerging as an important growth opportunity for Cadence as autonomous agents expand the design exploration space and call the company’s underlying physically accurate engines more frequently. Cadence has expanded its Agentic AI portfolio with AuraStack, ChipStack, ViraStack and InnoStack. ChipStack has more than 20 customer engagements and is deployed in production across multiple chip designs, while ViraStack has more than 25 customer engagements. Early customer results have demonstrated productivity improvements ranging from 2x to more than 40x in certain use cases.
The company is also seeing broad-based strength across its businesses. All product groups delivered double-digit year-over-year growth in the second quarter. IP revenue increased more than 40%, Core EDA grew 18%, hardware delivered another record quarter and System Design and Analysis revenue increased 37%. Strong demand from AI and HPC customers, including hyperscalers and leading semiconductor companies, supported these results.
Cadence raised its 2026 outlook, reflecting continued business momentum. The company now expects revenue of $6.260-$6.340 billion, non-GAAP operating margin of 43.75-44.75% and non-GAAP EPS of $8.05-$8.15. At the midpoint, revenue growth is expected to be 19%, with operating cash flow of approximately $2 billion. For the third quarter, revenue is projected at $1.595-$1.625 billion.
Management views Agentic AI as a demand accelerator, with customers seeking to manage rising design complexity rather than reduce design activity. Increased agent usage can drive both new Agentic workflow products and greater use of Cadence’s core tools.
Taking a Look at CDNS’ CompetitorsKeysight Technologies, Inc. (KEYS - Free Report) is benefiting from growing customer investments in advanced node, memory and silicon photonics. It has secured wafer test solution wins supporting silicon photonics and advanced node programs across Asia, the United States and Europe. The company continues to convert growth into cash, which supports product investment, acquisitions and shareholder returns. An expanding software and services mix, recurring revenue streams and leadership in 5G, 6G and network technologies strengthen its competitive position. Focus on product diversification and expansion into aerospace, defense and automotive markets is a positive. For the third quarter of fiscal 2026, Keysight expects revenues in the range of $1.73-$1.75 billion.
Synopsys, Inc. (SNPS - Free Report) is gaining from design wins, driven by its product portfolio. Growth in the hybrid working trend is driving demand for bandwidth. Strong traction for Synopsys’ Fusion Compiler product is boosting its top line. The growing demand for advanced technology, design, IP and security solutions also creates solid prospects. The rising impact of artificial intelligence, 5G, the Internet of Things and big data is driving investments in new computing and machine learning architectures. For fiscal 2026, Synopsys raised its revenue outlook to $9.625-$9.705 billion, up from the prior guided range of $9.56-$9.66 billion. For the third quarter of fiscal 2026, the company expects revenues of $2.41-$2.46 billion and non-GAAP earnings of $3.63-$3.69 per share.
CDNS’ Price Performance, Valuation & EstimatesShares of Cadence have gained 10.1% in the past six months, underperforming the Zacks Computer and Technology sector’s appreciation of 17.5%.
Image Source: Zacks Investment Research
From a valuation standpoint, CDNS stock is currently trading at a trailing 12-month Price/Earnings ratio of 53.88X, which is higher than the Zacks Computer - Software industry average of 26.97X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CDNS’ 2026 earnings is pegged at $8.12, which suggests 13.73% growth over the figure reported in 2025.
CDNS currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Chin-Chi Teng, Sr. Vice President at Cadence Design Systems, Inc. (CDNS -2.06%), sold 4,732 shares of common stock on Aug. 21, 2026. SEC Form 4 filing.
Transaction summaryMetricValueTransaction value~$1.5 millionShares sold (Directly held)4,732Post-transaction shares (Directly held)138,049Post-transaction value$44.04 millionTransaction value based on SEC Form 4 weighted average sale price ($314.49); post-transaction value based on Aug. 21, 2026, market close ($319.02).
Key questionsWhat is the context of this transaction within the insider's broader holdings?
Following the sale of 4,732 shares, Chin-Chi Teng retains a direct position of 138,049 shares and also holds 8,668 derivative securities, including vested and unvested stock options.How does the execution price compare to recent market levels?
The shares were sold at $314.49 per share, while the stock was priced at $315.92 as of the Aug. 24, 2026, market close.What are the technical details of the derivative exercise reported in this filing?
The transaction involved the conversion of 1,000 options at an exercise price of $202.94, part of an award that vests at 1/48th per month, with the resulting shares sold the same day, included in the reported total.Was this a discretionary trade?
This sale was completed under a Rule 10b5-1 trading plan, a mechanism that allows insiders to schedule trades in advance to manage liquidity needs while the stock is valued at levels specified in the plan.Company OverviewMetricValueShare Price (as of market close 2026-08-24)$315.92Market Capitalization$87.0 billionRevenue (TTM)$5.8 billionNet Income (TTM)$1.4 billionCompany SnapshotCadence Design Systems delivers a comprehensive portfolio of electronic design automation (EDA) software, specialized hardware, and professional services that enable semiconductor and systems companies to design, verify, and manufacture integrated circuits and electronic systems.The company generates revenue through software licensing, subscription-based services, and hardware sales, with a business model centered on providing mission-critical tools and platforms that are essential to the semiconductor design and verification workflow.Cadence serves a global customer base of semiconductor manufacturers, fabless design companies, and systems-on-chip (SoC) developers across automotive, data center, consumer electronics, and industrial sectors.Cadence Design Systems is a market-leading provider of electronic design automation solutions with a $87.0 billion market capitalization and $5.8 billion in TTM revenue. The company maintains a competitive advantage through its integrated portfolio of functional verification, simulation, emulation, and prototyping solutions that address the complex design challenges inherent in advanced semiconductor development. With 13,800 employees globally, Cadence serves as a critical infrastructure provider for the semiconductor industry, supporting customers in designing next-generation chips for artificial intelligence, high-performance computing, and advanced automotive applications.
What this transaction means for investorsChin-Chi Teng's sale of Cadence shares is likely one that should not worry investors.
As previously mentioned, this was a pre-planned sale initiated under Rule 10b5-1, indicating it was likely to happen regardless of the tech stock's price action.
Moreover, Teng sold only about 3% of his shares, and it involved an options exercise. This implies it occurred for personal reasons rather than a concern about Cadence stock.
Furthermore, the company's market positioning suggests that investors should pay more attention to the 97% of shares Teng chose to keep. In the second quarter of 2026, revenue rose by 24% yearly to almost $1.6 billion. Additionally, the $367 million of net income in Q2 far surpassed the $100 million in the year-ago quarter.
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The rise in demand for semiconductors drives these gains. As chip design pushes against physical limitations, Cadence's software, hardware, and IP are critical to the design process. Since the company and Synopsys hold a near-duopoly over this process, the stock appears to have a bright, long-term future.
It has been about a month since the last earnings report for Cadence Design Systems (CDNS - Free Report) . Shares have lost about 3.7% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Cadence due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Cadence Design Systems, Inc. before we dive into how investors and analysts have reacted as of late.
Cadence Q2 Earnings Top EstimatesCadence delivered strong second-quarter 2026 results, driven by broad-based demand for its AI-oriented portfolio amid robust design activity and new system architectures across hyperscaler infrastructure and physical AI. Non-GAAP earnings per share (EPS) of $2.11 beat the Zacks Consensus Estimate by 2.9%, increased 27.9% year over year and topped management’s guided range of $2.02 to $2.08.
Revenues of $1.584 billion beat the Zacks Consensus Estimate by 0.5% and increased 24.2% year over year. The figure was within the management’s guided range of $1.555-$1.595 billion. All the product groups witnessed double-digit growth.
On the earnings call, the company cited agentic AI as a durable tailwind. Cadence expects agentic tools to drive higher EDA consumption and usage across its platform as customers run more simulations, verification and implementation cycles, thereby expanding the addressable market. Management highlighted “strong early traction” for its AI Super-Agent portfolio.
A standout metric was a record backlog of $8.1 billion, driven by strong bookings.
Strong quarterly performance and accelerating AI demand led to a raise in its 2026 revenue outlook.
Cadence raised its full-year 2026 revenue outlook to a band of $6.26-$6.34 billion, compared with the earlier guided range of $6.125-$6.225 billion.
Non-GAAP EPS for 2026 is now expected to be between $8.05 and $8.15, compared with the earlier guided range of $7.85 to $7.95.
Segment PerformanceProduct & Maintenance revenues (90.3% of total revenues) of $1.431 billion rose 22.3% year over year. Services revenues (9.7%) of $154 million jumped 46.7% year over year.
Recurring revenues comprised 78% of total revenues, while the remainder was upfront revenues.
The Americas contributed 43% of revenues, while China accounted for 15%, Other Asia 20%, Europe, Middle East and Africa 15% and Japan 7%, pointing to diversified demand across geographies.
Product-wise, Core EDA, Intellectual Property (“IP”) and Systems Design & Analysis accounted for 68%, 15% and 17% of total revenues, respectively.
The System Design & Analysis business, up 37% in the second quarter, is gaining from higher demand for Allegro X AI, 3D-IC and BETA CAE solutions. Management noted that the integration of Hexagon's D&E business was “progressing well” with some deals closed with key clients in the quarter.
Core EDA business, which includes Custom IC, Digital IC and Functional Verification, experienced 18% year-over-year growth.
The demand for new hardware systems continued to gain traction, driven by AI/HPC customers. Apart from hardware, demand for digital full-flow solutions was steady, with expanded adoption of the Tempus and Certus sign-off tools. It added 12 new logos in the reported quarter as well as expanded business with several AI clients.
The IP business was up 40% year over year in the second quarter. The company is witnessing higher demand for its Star IP portfolio across AI and HPC applications, including HBM, PCIe, UCIe and LPDDR6.
Profitability NumbersNon-GAAP gross margin expanded 100 basis points (bps) to 88.2%.
Total non-GAAP costs and expenses increased 18.4% year over year to $863 million.
However, non-GAAP operating margin expanded 270 bps on a year-over-year basis to 45.5%.
Balance Sheet & Cash FlowAs of June 30, 2026, Cash and cash equivalents stood at $1.44 billion compared with $1.407 billion as of March 31, 2026.
Long-term debt was $2.482 billion, compared with $2.481 billion as of March 31, 2026.
Cadence generated an operating cash flow of $635 million in the reported quarter compared with the prior quarter’s $356 million. Free cash flow was $582 million compared with $307 million in the previous quarter.
The company repurchased its shares worth $200 million in the second quarter.
OutlookNon-GAAP operating margin for 2026 is now forecasted to be in the band of 43.75% to 44.75%, compared with the range of 43.5% to 44.5% guided earlier.
Also, operating cash flow is expected to be $2 billion compared with $1.875 billion to $1.975 billion projected earlier. The company expects to utilize at least 50% of its free cash flow to repurchase shares in 2026.
For the third quarter of 2026, revenues are estimated to be $1.595-$1.625 billion. The company reported sales of $1.55 billion in the year-ago quarter.
Non-GAAP EPS is anticipated to be between $2.01 and $2.07 compared with $1.92 reported in the year-ago quarter.
Non-GAAP operating margin is estimated to be between 43.5% and 44.5% in the third quarter.
How Have Estimates Been Moving Since Then?It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 6.85% due to these changes.
VGM ScoresAt this time, Cadence has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock has a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
OutlookEstimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Cadence has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry PlayerCadence belongs to the Zacks Computer - Software industry. Another stock from the same industry, Pegasystems (PEGA - Free Report) , has gained 15.1% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.
Pegasystems reported revenues of $420.72 million in the last reported quarter, representing a year-over-year change of +9.4%. EPS of $0.35 for the same period compares with $0.28 a year ago.
Pegasystems is expected to post earnings of $0.48 per share for the current quarter, representing a year-over-year change of +60%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
Pegasystems has a Zacks Rank #5 (Strong Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
Shares Fall, Targets Rise—Markets and Analysts Diverge on SynopsysCadence Design Systems NASDAQ: CDNS said demand for semiconductor design software is being supported by a growing number of companies developing custom chips, rising design complexity and the use of artificial intelligence in semiconductor development.
Speaking at Deutsche Bank’s 20th annual technology conference, Richard Gu, Cadence’s vice president of investor relations, said the semiconductor and systems industries have increasingly converged over the past 10 to 15 years. Hyperscalers, autonomous-vehicle companies and AI model companies are among the organizations designing their own application-specific integrated circuits, he said.
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3 Companies Quietly Essential to Data Center and AI Operations“The aperture is expanded dramatically” through new customers and design starts, Gu said, while the complexity of those designs is also increasing. He characterized those factors as long-term tailwinds for Cadence, which supplies electronic design automation, intellectual property, hardware systems and simulation software.
AI agents and productivity Gu said AI is serving as a “turbocharger” for the semiconductor ecosystem and that Cadence is both supplying tools used to develop AI accelerators and applying AI to its own products.
Beyond NVIDIA: Picks-and-Shovels AI Plays with Strong MomentumThe company has introduced several “super agents” designed to automate portions of chip development, including ChipStack for front-end design verification, Veristack for analog design-flow orchestration, Innostack for digital flows and Aurastack for packaging. Gu said ChipStack can generate RTL code from design specifications, create test benches and invoke underlying simulation and verification tools.
According to Gu, the agents are intended to address a widening gap between customers’ engineering needs and the supply of available chip designers. He said chip-design workloads could rise by 30 to 40 times over the next five to six years, making automation increasingly important.
Gu cited comments by NVIDIA CEO Jensen Huang at Computex indicating that ChipStack had produced a 40-times productivity benefit. Cadence plans to monetize the agents through standalone pricing, additional token-based consumption once prescribed workloads are exceeded, and increased use of the company’s underlying EDA tools, he said.
He added that the agents could help smaller teams undertake more sophisticated chip-development efforts, potentially lowering barriers for newer entrants.
Broad-based growth across product lines Gu said Cadence’s most recent second-quarter revenue grew 24%, with core EDA revenue up approximately 18% to 19%, system design and analysis revenue rising more than 35%, and IP revenue increasing more than 40%. Core EDA represents about 70% of the company’s business, he said.
For the full year, Gu said Cadence expects to grow 19% and generate a non-GAAP operating margin of 44.25%. He said the company expects its combined growth and profitability metrics to exceed the “Rule of 60,” referring to the sum of revenue growth and operating margin.
Cadence’s IP strategy is focused on advanced-node technologies rather than attempting to serve every category, Gu said. The company is targeting connectivity-related IP, including HBM, UCIe and PCIe, that is exposed to AI infrastructure demand. He said the IP business is on pace to reach a $1 billion annualized run rate by year-end.
While Gu called IP a good business, he said EDA remains more attractive because customers generally must purchase EDA capabilities rather than build them internally. He said Cadence aims to balance IP growth with margin expansion and continue targeting a 50% incremental margin for the company overall.
Backlog, China and system simulation Cadence exited the second quarter with a record $8.1 billion backlog, Gu said. He noted that its current remaining performance obligation coverage ratio was about 58%, which he said provides visibility into revenue expected over the next 12 months.
The company’s typical EDA software contracts run for roughly 2.5 to three years and are recognized ratably, while hardware follows a shorter pattern and is typically evaluated on a six-month outlook, Gu said.
Gu said China remains a healthy and balanced market for Cadence, with growth expected to be at least in line with the company average this year. Cadence sells emulation systems, EDA tools and IP in China, he said, and works with customers including large language model developers, hyperscalers and autonomous-driving companies.
He said local Chinese competitors remain smaller, offer more point tools and lack the full design flows and foundry certifications that Cadence provides. The company does not view them as a near- or medium-term threat, he said.
In system design and analysis, Gu said Cadence is integrating the Hexagon business it acquired about two years ago and is focused on creating a full flow for physical AI and structural design. He said the integration is tracking in line with expectations.
Gu also highlighted Cadence’s Millennium platform, developed with NVIDIA, which combines GPU computing with Cadence simulation software. He said customers have reported productivity improvements of 50 to 60 times in certain applications, and the technology could have uses in aerospace, defense and automotive markets.
Long-term outlook Gu said investors should watch recurring revenue growth as a measure of Cadence’s progress, as the company’s subscription and consumption-based AI offerings are expected to flow through that metric. He maintained that Cadence’s business is more closely tied to design starts and design complexity than semiconductor unit volumes.
Even if semiconductor customers enter a downturn, R&D budgets have historically been among their most protected spending categories, Gu said. He said Cadence’s revenue, margins, earnings per share and cash flow have shown steady growth through prior industry cycles.
“Our business is not driven by volume,” Gu said. “It’s driven by design starts and design complexities.”
About Cadence Design Systems (NASDAQ:CDNS)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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Advisors Capital Management LLC acquired a new position in shares of Cadence Design Systems, Inc. (NASDAQ:CDNS – Free Report) in the 2nd quarter, according to its most recent filing with the Securities and Exchange Commission (SEC). The institutional investor acquired 2,460 shares of the software maker’s stock, valued at approximately $924,000.
A number of other hedge funds have also bought and sold shares of the company. Whipplewood Advisors LLC lifted its holdings in Cadence Design Systems by 933.3% in the first quarter. Whipplewood Advisors LLC now owns 93 shares of the software maker’s stock valued at $26,000 after buying an additional 84 shares during the period. Brown Lisle Cummings Inc. raised its position in shares of Cadence Design Systems by 860.0% in the 1st quarter. Brown Lisle Cummings Inc. now owns 96 shares of the software maker’s stock worth $27,000 after acquiring an additional 86 shares in the last quarter. University of Texas Texas AM Investment Management Co. acquired a new position in shares of Cadence Design Systems in the 4th quarter valued at about $28,000. Swiss RE Ltd. acquired a new position in shares of Cadence Design Systems in the 4th quarter valued at about $29,000. Finally, Avalon Trust Co bought a new stake in shares of Cadence Design Systems during the 2nd quarter valued at about $30,000. Institutional investors own 84.85% of the company’s stock.
Insider Activity In other news, CEO Anirudh Devgan sold 51,822 shares of the business’s stock in a transaction that occurred on Monday, June 1st. The stock was sold at an average price of $395.00, for a total value of $20,469,690.00. Following the transaction, the chief executive officer owned 278,524 shares in the company, valued at $110,016,980. The trade was a 15.69% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Ita M. Brennan sold 180 shares of the company’s stock in a transaction that occurred on Wednesday, June 10th. The shares were sold at an average price of $387.45, for a total value of $69,741.00. Following the completion of the transaction, the director directly owned 8,004 shares of the company’s stock, valued at approximately $3,101,149.80. This represents a 2.20% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last 90 days, insiders have sold 89,599 shares of company stock worth $35,710,627. Corporate insiders own 0.49% of the company’s stock.
Analysts Set New Price Targets Several equities research analysts recently commented on CDNS shares. Robert W. Baird raised their target price on Cadence Design Systems from $415.00 to $420.00 and gave the stock an “outperform” rating in a research note on Tuesday, July 28th. KeyCorp restated an “overweight” rating on shares of Cadence Design Systems in a report on Tuesday, July 28th. Rosenblatt Securities raised their price objective on shares of Cadence Design Systems from $410.00 to $420.00 and gave the stock a “buy” rating in a research report on Tuesday, July 28th. Piper Sandler lifted their price objective on shares of Cadence Design Systems from $325.00 to $349.00 and gave the company a “neutral” rating in a research note on Tuesday, July 28th. Finally, Bank of America boosted their target price on shares of Cadence Design Systems from $400.00 to $420.00 and gave the company a “buy” rating in a research report on Tuesday, July 28th. Thirteen investment analysts have rated the stock with a Buy rating and three have given a Hold rating to the company’s stock. Based on data from MarketBeat.com, Cadence Design Systems presently has a consensus rating of “Moderate Buy” and a consensus price target of $405.69. Read Our Latest Stock Report on CDNS
Cadence Design Systems Stock Performance NASDAQ CDNS opened at $319.02 on Friday. The company has a fifty day moving average price of $353.70 and a 200-day moving average price of $331.25. The firm has a market cap of $87.85 billion, a price-to-earnings ratio of 63.42, a PEG ratio of 3.36 and a beta of 1.15. The company has a debt-to-equity ratio of 0.36, a current ratio of 1.74 and a quick ratio of 1.53. Cadence Design Systems, Inc. has a 1 year low of $262.75 and a 1 year high of $416.69.
Cadence Design Systems (NASDAQ:CDNS – Get Free Report) last released its quarterly earnings results on Monday, July 27th. The software maker reported $2.11 earnings per share for the quarter, beating analysts’ consensus estimates of $2.05 by $0.06. Cadence Design Systems had a net margin of 23.60% and a return on equity of 27.98%. The company had revenue of $1.58 billion for the quarter, compared to analyst estimates of $1.58 billion. During the same period last year, the firm earned $1.65 earnings per share. The firm’s revenue was up 24.2% on a year-over-year basis. Cadence Design Systems has set its FY 2026 guidance at 8.050-8.150 EPS and its Q3 2026 guidance at 2.010-2.070 EPS. As a group, equities research analysts predict that Cadence Design Systems, Inc. will post 6.4 EPS for the current fiscal year.
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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.
Recommended Stories Five stocks we like better than Cadence Design Systems Blueprint for a Boom: SEC Clears the Crypto Runway Ross Stores Just Flipped the Off-Price Retail Story After TJX’s Marmaxx Miss Advance Auto Parts Plunged, But Its Turnaround Is Still Working Is Palo Alto Networks Priced for Perfection Again as AI Security Demand Accelerates? Want to see what other hedge funds are holding CDNS? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Cadence Design Systems, Inc. (NASDAQ:CDNS – Free Report).
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Bank of New York Mellon Corp bought a new stake in Cadence Design Systems, Inc. (NASDAQ:CDNS – Free Report) during the second quarter, according to the company in its most recent disclosure with the Securities & Exchange Commission. The institutional investor bought 1,618,219 shares of the software maker’s stock, valued at approximately $607,350,000. Bank of New York Mellon Corp owned about 0.59% of Cadence Design Systems at the end of the most recent reporting period.
Several other large investors have also recently made changes to their positions in CDNS. Whipplewood Advisors LLC boosted its holdings in Cadence Design Systems by 933.3% during 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 during the period. Brown Lisle Cummings Inc. boosted its stake in shares of Cadence Design Systems by 860.0% in the first quarter. Brown Lisle Cummings Inc. now owns 96 shares of the software maker’s stock valued at $27,000 after purchasing an additional 86 shares during the period. University of Texas Texas AM Investment Management Co. purchased a new position in shares of Cadence Design Systems in the fourth quarter valued at approximately $28,000. Swiss RE Ltd. acquired a new stake in Cadence Design Systems during the 4th quarter worth approximately $29,000. Finally, Avalon Trust Co purchased a new position in Cadence Design Systems in the 2nd quarter valued at approximately $30,000. 84.85% of the stock is currently owned by institutional investors and hedge funds.
Insiders Place Their Bets In other news, Director Ita M. Brennan sold 180 shares of the company’s stock in a transaction that occurred on Wednesday, June 10th. The stock was sold at an average price of $387.45, for a total transaction of $69,741.00. Following the completion of the sale, the director owned 8,004 shares in the company, valued at $3,101,149.80. This represents a 2.20% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available 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 business’s stock in a transaction on Thursday, June 11th. The shares were sold at an average price of $381.34, for a total transaction of $576,204.74. Following the completion of the transaction, the director directly owned 23,264 shares in the company, valued at $8,871,493.76. This represents a 6.10% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders have sold 89,599 shares of company stock valued at $35,710,627. 0.49% of the stock is owned by company insiders.
Cadence Design Systems Stock Performance Shares of Cadence Design Systems stock opened at $319.02 on Friday. The firm’s fifty day simple moving average is $353.70 and its 200-day simple moving average is $331.25. Cadence Design Systems, Inc. has a 12 month low of $262.75 and a 12 month high of $416.69. The stock has a market capitalization of $87.85 billion, a price-to-earnings ratio of 63.42, a PEG ratio of 3.36 and a beta of 1.15. The company has a debt-to-equity ratio of 0.36, a current ratio of 1.74 and a quick ratio of 1.53. Cadence Design Systems (NASDAQ:CDNS – Get Free Report) last posted its quarterly earnings data on Monday, July 27th. The software maker reported $2.11 EPS for the quarter, beating analysts’ consensus estimates of $2.05 by $0.06. The company had revenue of $1.58 billion for the quarter, compared to analyst estimates of $1.58 billion. Cadence Design Systems had a net margin of 23.60% and a return on equity of 27.98%. Cadence Design Systems’s quarterly revenue was up 24.2% on a year-over-year basis. During the same period in the previous year, the business posted $1.65 earnings per share. Cadence Design Systems has set its FY 2026 guidance at 8.050-8.150 EPS and its Q3 2026 guidance at 2.010-2.070 EPS. As a group, equities analysts forecast that Cadence Design Systems, Inc. will post 6.4 earnings per share for the current year.
Wall Street Analysts Forecast Growth A number of research analysts recently issued reports on CDNS shares. Stifel Nicolaus lifted their target price on Cadence Design Systems from $395.00 to $432.00 and gave the company a “buy” rating in a report on Tuesday, June 9th. Robert W. Baird upped their price target on Cadence Design Systems from $415.00 to $420.00 and gave the stock an “outperform” rating in a report on Tuesday, July 28th. Benchmark reaffirmed a “buy” rating on shares of Cadence Design Systems in a research report on Tuesday, July 28th. Rosenblatt Securities boosted their price objective on Cadence Design Systems from $410.00 to $420.00 and gave the stock a “buy” rating in a research report on Tuesday, July 28th. Finally, Piper Sandler upped their target price on shares of Cadence Design Systems from $325.00 to $349.00 and gave the stock a “neutral” rating in a research note on Tuesday, July 28th. Thirteen analysts have rated the stock with a Buy rating and three have given a Hold rating to the stock. According to MarketBeat, the company presently has a consensus rating of “Moderate Buy” and an average target price of $405.69.
Check Out Our Latest Stock Report on CDNS
(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.
Featured Articles Five stocks we like better than Cadence Design Systems Blueprint for a Boom: SEC Clears the Crypto Runway Ross Stores Just Flipped the Off-Price Retail Story After TJX’s Marmaxx Miss Advance Auto Parts Plunged, But Its Turnaround Is Still Working Is Palo Alto Networks Priced for Perfection Again as AI Security Demand Accelerates? Want to see what other hedge funds are holding CDNS? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Cadence Design Systems, Inc. (NASDAQ:CDNS – Free Report).
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Allworth Financial LP acquired a new stake in Cadence Design Systems, Inc. (NASDAQ:CDNS – Free Report) during the 2nd quarter, according to its most recent disclosure with the Securities and Exchange Commission. The institutional investor acquired 8,588 shares of the software maker’s stock, valued at approximately $3,223,000.
Other institutional investors have also recently made changes to their positions in the company. Norges Bank acquired a new position in shares of Cadence Design Systems in the 4th quarter valued at about $1,352,922,000. J. Stern & Co. LLP lifted its holdings in Cadence Design Systems by 10,159.3% in the fourth quarter. J. Stern & Co. LLP now owns 2,953,256 shares of the software maker’s stock valued at $923,129,000 after acquiring an additional 2,924,470 shares during the period. Wellington Management Group LLP boosted its position in Cadence Design Systems by 218.6% in the 4th quarter. Wellington Management Group LLP now owns 2,553,225 shares of the software maker’s stock worth $798,087,000 after purchasing an additional 1,751,927 shares in the last quarter. Bank of New York Mellon Corp purchased a new stake in Cadence Design Systems in the 2nd quarter worth approximately $607,350,000. Finally, Deutsche Bank AG acquired a new stake in shares of Cadence Design Systems during the 2nd quarter worth approximately $532,338,000. Hedge funds and other institutional investors own 84.85% of the company’s stock.
Insiders Place Their Bets In related news, Director Ita M. Brennan sold 180 shares of the company’s stock in a transaction dated Wednesday, June 10th. The shares were sold at an average price of $387.45, for a total value of $69,741.00. Following the completion of the sale, the director owned 8,004 shares of the company’s stock, valued at approximately $3,101,149.80. This represents a 2.20% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which can be accessed 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 shares were sold at an average price of $381.34, for a total transaction of $576,204.74. Following the completion of the sale, the director directly owned 23,264 shares of the company’s stock, valued at $8,871,493.76. This 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. Over the last ninety days, insiders sold 89,599 shares of company stock valued at $35,710,627. Insiders own 0.49% of the company’s stock.
Cadence Design Systems Stock Performance NASDAQ CDNS opened at $319.02 on Friday. The company has a market cap of $87.85 billion, a PE ratio of 63.42, a price-to-earnings-growth ratio of 3.36 and a beta of 1.15. The stock’s 50 day simple moving average is $353.70 and its 200-day simple moving average is $331.25. Cadence Design Systems, Inc. has a 1-year low of $262.75 and a 1-year high of $416.69. The company has a debt-to-equity ratio of 0.36, a current ratio of 1.74 and a quick ratio of 1.53. Cadence Design Systems (NASDAQ:CDNS – Get Free Report) last issued its quarterly earnings results on Monday, July 27th. The software maker reported $2.11 EPS for the quarter, topping the consensus estimate of $2.05 by $0.06. The firm had revenue of $1.58 billion during the quarter, compared to analysts’ expectations of $1.58 billion. Cadence Design Systems had a return on equity of 27.98% and a net margin of 23.60%.The firm’s revenue for the quarter was up 24.2% on a year-over-year basis. During the same period in the previous year, the business earned $1.65 earnings per share. Cadence Design Systems has set its FY 2026 guidance at 8.050-8.150 EPS and its Q3 2026 guidance at 2.010-2.070 EPS. As a group, equities research analysts anticipate that Cadence Design Systems, Inc. will post 6.4 EPS for the current fiscal year.
Wall Street Analysts Forecast Growth CDNS has been the subject of several analyst reports. Citigroup boosted their target price on shares of Cadence Design Systems from $400.00 to $420.00 and gave the company a “buy” rating in a research note on Tuesday, July 28th. Wall Street Zen raised shares of Cadence Design Systems from a “hold” rating to a “buy” rating in a report on Saturday, August 1st. Berenberg Bank set a $440.00 price objective on shares of Cadence Design Systems in a research report on Wednesday, May 27th. Weiss Ratings raised shares of Cadence Design Systems from a “hold (c)” rating to a “hold (c+)” rating in a research note on Thursday, July 30th. Finally, Bank of America raised their target price on Cadence Design Systems from $400.00 to $420.00 and gave the company a “buy” rating in a research report on Tuesday, July 28th. Thirteen analysts have rated the stock with a Buy rating and three have issued a Hold rating to the stock. According to MarketBeat.com, Cadence Design Systems presently has a consensus rating of “Moderate Buy” and an average price target of $405.69.
Check Out Our Latest Research Report on CDNS
(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.
Featured Articles Five stocks we like better than Cadence Design Systems Blueprint for a Boom: SEC Clears the Crypto Runway Ross Stores Just Flipped the Off-Price Retail Story After TJX’s Marmaxx Miss Advance Auto Parts Plunged, But Its Turnaround Is Still Working Is Palo Alto Networks Priced for Perfection Again as AI Security Demand Accelerates? Want to see what other hedge funds are holding CDNS? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Cadence Design Systems, Inc. (NASDAQ:CDNS – Free Report).
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Algebris UK Ltd. purchased a new stake in Cadence Design Systems, Inc. (NASDAQ:CDNS – Free Report) in the second quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The fund purchased 3,280 shares of the software maker’s stock, valued at approximately $1,227,000.
A number of other hedge funds and other institutional investors have also made changes to their positions in CDNS. Whipplewood Advisors LLC increased its stake 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 purchasing an additional 84 shares in the last quarter. Brown Lisle Cummings Inc. grew its holdings in Cadence Design Systems by 860.0% in the first quarter. Brown Lisle Cummings Inc. now owns 96 shares of the software maker’s stock valued at $27,000 after purchasing an additional 86 shares during the period. University of Texas Texas AM Investment Management Co. purchased a new stake in shares of Cadence Design Systems in the fourth quarter valued at approximately $28,000. Swiss RE Ltd. acquired a new position in shares of Cadence Design Systems during the 4th quarter worth approximately $29,000. Finally, Avalon Trust Co purchased a new position in shares of Cadence Design Systems during the 2nd quarter valued at approximately $30,000. Institutional investors and hedge funds own 84.85% of the company’s stock.
Insider Activity In other Cadence Design Systems news, VP Paul Cunningham sold 2,000 shares of Cadence Design Systems stock in a transaction dated Monday, August 17th. The shares were sold at an average price of $323.32, for a total transaction of $646,640.00. Following the transaction, the vice president directly owned 124,586 shares of the company’s stock, valued at $40,281,145.52. The trade was a 1.58% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Ita M. Brennan sold 180 shares of the business’s stock in a transaction dated Wednesday, June 10th. The shares were sold at an average price of $387.45, for a total transaction of $69,741.00. Following the completion of the transaction, the director owned 8,004 shares in the company, valued at $3,101,149.80. The trade was a 2.20% decrease in their ownership of the stock. 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. Insiders sold 141,486 shares of company stock valued at $54,908,817 in the last quarter. Insiders own 0.49% of the company’s stock.
Cadence Design Systems Price Performance NASDAQ:CDNS opened at $314.98 on Thursday. Cadence Design Systems, Inc. has a one year low of $262.75 and a one year high of $416.69. The stock has a market cap of $86.74 billion, a PE ratio of 62.62, a P/E/G ratio of 3.40 and a beta of 1.15. The company has a debt-to-equity ratio of 0.36, a quick ratio of 1.53 and a current ratio of 1.74. The stock has a 50 day moving average price of $356.42 and a 200 day moving average price of $331.22. Cadence Design Systems (NASDAQ:CDNS – Get Free Report) last released its quarterly earnings data on Monday, July 27th. The software maker reported $2.11 earnings per share for the quarter, topping analysts’ consensus estimates of $2.05 by $0.06. Cadence Design Systems had a return on equity of 27.98% and a net margin of 23.60%.The company had revenue of $1.58 billion for the quarter, compared to analyst estimates of $1.58 billion. During the same quarter in the previous year, the company posted $1.65 earnings per share. The firm’s revenue for the quarter was up 24.2% compared to the same quarter last year. Cadence Design Systems has set its FY 2026 guidance at 8.050-8.150 EPS and its Q3 2026 guidance at 2.010-2.070 EPS. Equities research analysts expect that Cadence Design Systems, Inc. will post 6.4 EPS for the current fiscal year.
Wall Street Analysts Forecast Growth Several equities analysts have issued reports on CDNS shares. Oppenheimer reaffirmed a “market perform” rating and set a $300.00 price objective on shares of Cadence Design Systems in a report on Tuesday, July 28th. Morgan Stanley restated an “overweight” rating and set a $400.00 price target on shares of Cadence Design Systems in a research report on Wednesday, July 29th. Rosenblatt Securities raised their price target on shares of Cadence Design Systems from $410.00 to $420.00 and gave the company a “buy” rating in a research note on Tuesday, July 28th. Weiss Ratings upgraded Cadence Design Systems from a “hold (c)” rating to a “hold (c+)” rating in a report on Thursday, July 30th. Finally, Needham & Company LLC reiterated a “buy” rating and set a $400.00 price objective on shares of Cadence Design Systems in a research note on Tuesday, July 28th. Thirteen research analysts have rated the stock with a Buy rating and three have issued a Hold rating to the company. Based on data from MarketBeat, Cadence Design Systems presently has an average rating of “Moderate Buy” and a consensus price target of $405.69.
View Our Latest Research Report on CDNS
(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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Investors interested in Computer - Software stocks are likely familiar with Intuit (INTU) and Cadence Design Systems (CDNS). But which of these two stocks presents investors with the better value opportunity right now?
On August 18, 2026, we delve into the DCF analysis for Cadence Design Systems Inc (CDNS), a company that has seen a mixed performance in its stock price recentl
Bank Hapoalim BM bought a new position in shares of Cadence Design Systems, Inc. (NASDAQ:CDNS – Free Report) in the second quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission. The institutional investor bought 4,924 shares of the software maker’s stock, valued at approximately $1,848,000.
A number of other institutional investors have also recently bought and sold shares of CDNS. Norges Bank bought a new position in Cadence Design Systems during the 4th quarter worth about $1,352,922,000. J. Stern & Co. LLP raised its stake in shares of Cadence Design Systems by 10,159.3% in the 4th quarter. J. Stern & Co. LLP now owns 2,953,256 shares of the software maker’s stock valued at $923,129,000 after purchasing an additional 2,924,470 shares during the period. Wellington Management Group LLP lifted its holdings in shares of Cadence Design Systems by 218.6% in the fourth quarter. Wellington Management Group LLP now owns 2,553,225 shares of the software maker’s stock valued at $798,087,000 after purchasing an additional 1,751,927 shares in the last quarter. Arrowstreet Capital Limited Partnership lifted its holdings in shares of Cadence Design Systems by 232.1% in the first quarter. Arrowstreet Capital Limited Partnership now owns 1,430,599 shares of the software maker’s stock valued at $397,521,000 after purchasing an additional 999,862 shares in the last quarter. Finally, Scge Management L.P. acquired a new position in shares of Cadence Design Systems during the second quarter worth about $187,663,000. Institutional investors own 84.85% of the company’s stock.
Cadence Design Systems Trading Up 0.3% Shares of Cadence Design Systems stock opened at $324.82 on Friday. The stock has a market cap of $89.45 billion, a P/E ratio of 64.58, a P/E/G ratio of 3.49 and a beta of 1.15. The company has a quick ratio of 1.53, a current ratio of 1.74 and a debt-to-equity ratio of 0.36. Cadence Design Systems, Inc. has a 12-month low of $262.75 and a 12-month high of $416.69. The business’s 50 day moving average is $360.72 and its 200-day moving average is $331.06.
Cadence Design Systems (NASDAQ:CDNS – Get Free Report) last released its earnings results on Monday, July 27th. The software maker reported $2.11 earnings per share for the quarter, beating the consensus estimate of $2.05 by $0.06. The business had revenue of $1.58 billion during the quarter, compared to analysts’ expectations of $1.58 billion. Cadence Design Systems had a net margin of 23.60% and a return on equity of 27.98%. The firm’s revenue was up 24.2% on a year-over-year basis. During the same period last year, the business earned $1.65 earnings per share. Cadence Design Systems has set its FY 2026 guidance at 8.050-8.150 EPS and its Q3 2026 guidance at 2.010-2.070 EPS. Equities research analysts predict that Cadence Design Systems, Inc. will post 6.4 earnings per share for the current fiscal year.
Analysts Set New Price Targets CDNS has been the subject of a number of research reports. Rosenblatt Securities increased their price objective on Cadence Design Systems from $410.00 to $420.00 and gave the stock a “buy” rating in a report on Tuesday, July 28th. Wall Street Zen raised Cadence Design Systems from a “hold” rating to a “buy” rating in a research report on Saturday, August 1st. Stifel Nicolaus raised their price target on shares of Cadence Design Systems from $395.00 to $432.00 and gave the stock a “buy” rating in a research note on Tuesday, June 9th. Berenberg Bank set a $440.00 price objective on shares of Cadence Design Systems in a report on Wednesday, May 27th. Finally, Wells Fargo & Company boosted their price objective on shares of Cadence Design Systems from $400.00 to $425.00 and gave the stock an “overweight” rating in a research report on Tuesday, May 26th. Thirteen investment analysts have rated the stock with a Buy rating and three have issued a Hold rating to the stock. According to data from MarketBeat, Cadence Design Systems presently has a consensus rating of “Moderate Buy” and an average target price of $405.69.
View Our Latest Report on CDNS
Insider Buying and Selling In other news, Director James D. Plummer sold 1,511 shares of the company’s stock in a transaction dated Thursday, June 11th. The shares were sold at an average price of $381.34, for a total value of $576,204.74. Following the sale, the director directly owned 23,264 shares of the company’s stock, valued at approximately $8,871,493.76. This represents a 6.10% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, VP Paul Cunningham sold 2,000 shares of the firm’s stock in a transaction dated Monday, June 15th. The shares were sold at an average price of $391.00, for a total transaction of $782,000.00. Following the completion of the sale, the vice president owned 126,586 shares of the company’s stock, valued at $49,495,126. This trade represents a 1.56% decrease in their ownership of the stock. 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. Over the last quarter, insiders have sold 140,557 shares of company stock worth $54,631,737. Corporate insiders own 0.49% of the company’s stock.
Cadence Design Systems Company Profile (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.
Further Reading Five stocks we like better than Cadence Design Systems Is Best Buy the AI Winner Hiding in the Electronics Aisle? Applied Materials Beat Everything but Wall Street’s Expectations for Margins Back From Orbit, Intuitive Machines’ Share Price Enters the Buy Zone Texas Roadhouse and Brinker International Have the Recipe Rivals Are Missing Want to see what other hedge funds are holding CDNS? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Cadence Design Systems, Inc. (NASDAQ:CDNS – Free Report).
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Key Takeaways Cadence raised 2026 revenue and non-GAAP EPS forecasts after second-quarter results beat expectations.Systems Design & Analysis grew 37%, while IP rose 40% on AI and high-performance computing demand.All segments delivered double-digit growth, and backlog reached a record $8.1 billion.
Cadence Design Systems (CDNS - Free Report) raised its 2026 financial outlook after second-quarter results topped expectations and AI-oriented demand expanded across its portfolio.
The larger issue is whether agentic AI can become a durable source of electronic design automation usage rather than a short-lived boost. Cadence’s recent engagement and product data provide early support for that thesis.
Cadence Q2 Beats Set Up the Guidance RaiseSecond-quarter revenues reached $1.584 billion, up 24.2% year over year and 0.5% above the Zacks Consensus Estimate. Non-GAAP earnings of $2.11 per share increased 27.9% and beat the consensus mark by 2.9%.
All product groups delivered double-digit growth, and backlog reached a record $8.1 billion. Core electronic design automation grew 18%, Systems Design & Analysis increased 37% and the intellectual property business rose 40%.
CDNS Raises Its 2026 Revenue and EPS ViewCadence lifted its 2026 revenue forecast to $6.26-$6.34 billion from $6.125-$6.225 billion. It also raised its non-GAAP earnings outlook to $8.05-$8.15 per share from $7.85-$7.95.
The company now expects operating cash flow of $2 billion, above the previous $1.875-$1.975 billion range. Its non-GAAP operating margin forecast increased to 43.75%-44.75% from 43.5%-44.5%.
CDNS Broadens AI Demand Across Hardware and IPThe Systems Design & Analysis business grew 37% in the second quarter, helped by demand for Allegro X AI, 3D-IC and BETA CAE solutions. The intellectual property business increased 40%, driven by demand across AI and high-performance computing applications.
Hardware demand remained firm among AI and high-performance computing customers. Cadence added 12 new hardware customers during the quarter and expanded business with several hyperscalers and AI innovators.
The company also cited agentic AI as a durable tailwind. Cadence has launched AuraStack AI Super Agent and is expanding and ChipStack and ViraStack. ViraStack has recorded more than 25 engagements and delivered 2X-10X productivity improvements versus traditional flows, as per Cadence.
Cadence Risks Still Temper the Growth NarrativeSynopsys, Inc. (SNPS - Free Report) competes across electronic design automation, silicon intellectual property and engineering simulation. Siemens AG (SIEGY - Free Report) , through Siemens EDA, also provides integrated-circuit design, verification and manufacturing tools, so Cadence must keep investing to defend its position.
International exposure creates currency risk, while AI infrastructure capital spending can be volatile. Goodwill and acquired intangible assets represented 56.2% of total assets at June 30, 2026, adding another execution and financial consideration.
CDNS Signals Support Growth but Not Aggressive BuyingThe higher outlook strengthens the operating narrative, but it does not eliminate valuation and execution risks. Cadence currently carries a Zacks Rank #3 (Hold), which supports a balanced stance rather than an aggressive near-term buying signal.
The Growth Score of B and Momentum Score of A fit the favorable growth and price-trend characteristics. The Value Score of F and VGM Score of C are less supportive, keeping valuation discipline important even as agentic AI broadens demand.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Takeaways Cadence is benefiting from rising AI-driven design demand as chip and system complexity increases.CDNS estimates call for 2026 revenues of $6.313B and earnings of $8.12 per share.Cadence trades at 36.3X forward earnings, while 2026 operating cash flow is expected near $2B.
Cadence Design Systems (CDNS - Free Report) combines rising AI-related demand, higher earnings expectations and stronger cash generation with a valuation that remains well above major benchmarks.
That mix creates a clear trade-off for investors. Growth prospects are improving, but the stock still requires buyers to pay a sizable premium for that growth.
Cadence AI Demand Supports a Strong Growth CaseCadence is benefiting from rising chip and system complexity and greater spending on AI-driven design. Management expects agentic AI to increase electronic design automation consumption as customers run more simulation, verification and implementation cycles.
The company is broadening its AI portfolio through AuraStack, ChipStack and ViraStack. ViraStack has more than 25 engagements and has delivered 2X-10X productivity improvements versus traditional design flows, as Cadence highlighted, supporting the case for wider platform usage.
CDNS Estimates Point to Continued Earnings ExpansionThe Zacks Consensus Estimate calls for 2026 revenues of $6.313 billion and 2027 revenues of $7.130 billion. Consensus earnings are $8.12 per share for 2026 and $9.41 for 2027.
Projected 2026 sales growth is 19.2%, while projected earnings growth is 13.7%. Those figures indicate continued expansion even after Cadence increased second-quarter revenues 24.2% year over year.
Cadence Still Trades at a Premium ValuationCDNS trades at 36.3X forward 12-month earnings versus 23.4X for its sub-industry and 20.7X for the S&P 500. Although that multiple is at the five-year low and below the 52.8X median, the relative premium remains substantial.
Image Source: Zacks Investment Research
The same pattern appears in sales-based measures. CDNS trades at 13.1X forward sales and 13.9X forward enterprise value to sales, compared with 6.2X on both measures for the sub-industry.
CDNS Cash Flow Strengthens the Investment CaseCadence expects about $2 billion in 2026 operating cash flow and plans to use at least 50% of annual free cash flow for share repurchases. It bought back $200 million of stock in each of the first two quarters.
Second-quarter operating cash flow reached $635 million, up from $356 million in the prior quarter. Free cash flow increased to $582 million from $307 million, giving the company more flexibility to fund investment and capital returns.
CDNS Risks Could Limit Multiple ExpansionSynopsys, Inc. (SNPS - Free Report) competes across electronic design automation, silicon intellectual property and engineering simulation. Siemens AG (SIEGY - Free Report) , through Siemens EDA, also spans integrated-circuit design, verification and manufacturing, which keeps competitive intensity high.
Cadence faces currency sensitivity because international operations have historically generated more than half of revenues. AI infrastructure spending can also be volatile, while goodwill and acquired intangible assets represented 56.2% of total assets at June 30, 2026.
Cadence Signals Favor Growth Over ValueCadence’s operating outlook supports the growth case, but the premium valuation argues against treating strong AI demand alone as sufficient reason to buy. The stock currently carries a Zacks Rank #3 (Hold), consistent with a more measured position.
Key Takeaways Cadence shares fell 12.9% in a month despite Q2 revenue rising 24.2% and earnings climbing 27.9%.CDNS raised 2026 revenue and earnings guidance, while backlog reached a record $8.1 billion.Cadence's valuation fell to 36.3X forward earnings, but it still trades well above key benchmarks.
Cadence Design Systems (CDNS - Free Report) shares have fallen 12.9% in the past month even though the company delivered double-digit revenue and earnings growth in the second quarter.
Image Source: Zacks Investment Research
The pullback has lowered the stock’s valuation sharply from its historical norms. The question is whether improving fundamentals and AI-related demand outweigh the premium that still remains.
CDNS Pullback Comes Despite Strong Q2 ResultsSecond-quarter revenues rose 24.2% year over year to $1.584 billion. Non-GAAP earnings increased 27.9% to $2.11 per share, with revenues and earnings beating the Zacks Consensus Estimate by 0.5% and 2.9%, respectively.
Demand was broad based, with all product groups posting double-digit growth. Backlog reached a record $8.1 billion, up from $7.8 billion at the end of 2025, supporting visibility across the multi-year design cycle.
Cadence Guidance Still Points to Solid 2026 GrowthCadence raised its 2026 revenue outlook to $6.26-$6.34 billion from $6.125-$6.225 billion. The non-GAAP earnings forecast moved to $8.05-$8.15 per share from $7.85-$7.95.
The company also increased its operating cash flow outlook to $2 billion. Its non-GAAP operating margin forecast now stands at 43.75%-44.75%, up from the prior 43.5%-44.5% range.
CDNS Valuation Has Compressed but Remains ElevatedCDNS trades at 36.3X forward 12-month earnings, the low end of its five-year range and well below its five-year median of 52.8X. The recent decline has therefore removed a meaningful portion of the stock’s historical valuation premium.
Image Source: Zacks Investment Research
That does not make the shares inexpensive relative to benchmarks. The sub-industry trades at 23.3X, the Zacks Computer and Technology sector at 21.5X and the S&P 500 at 20.7X, leaving CDNS at a sizable premium.
Cadence AI Catalysts Could Support a ReboundCadence is expanding its agentic AI portfolio across chip, system and packaging workflows. ViraStack has recorded more than 25 engagements and delivered 2X-10X productivity improvements versus traditional flows, according to the company.
Hardware demand is another support. Cadence added 12 new hardware customers in the second quarter and expanded at several hyperscalers and AI innovators, while the Systems Design & Analysis business grew 37%.
Cadence Faces Competition and Balance-Sheet RisksSynopsys, Inc. (SNPS - Free Report) competes across electronic design automation, silicon intellectual property and engineering simulation. Siemens AG (SIEGY - Free Report) , through Siemens EDA, also offers tools spanning integrated-circuit design, verification and manufacturing, keeping competitive pressure elevated.
Cadence also has substantial international exposure, creating sensitivity to currency swings. Goodwill and acquired intangible assets totaled $6.789 billion, or 56.2% of total assets, at June 30, 2026.
CDNS Signals Argue for Patience After the DropThe pullback improves the entry price, but valuation remains high enough to limit the case for treating the decline as an automatic buying opportunity. Cadence currently carries a Zacks Rank #3 (Hold), which supports a measured stance rather than an aggressive new purchase.
NEW YORK--(BUSINESS WIRE)--Cadence, the clinical AI company automating the treatment of chronic disease, today announced its HypertensionOS software has been selected by the U.S. Food and Drug Administration as the second participant in the Technology-Enabled Meaningful Patient Outcomes (TEMPO) for Digital Health Devices Pilot. HypertensionOS is prescription software as a medical device (“SaMD”) that incorporates AI-assisted functionality to support clinician-supervised medication management fo.
There are many ways to play the artificial intelligence (AI) boom right now, and two of the best angles are to invest in semiconductor equipment makers like ASML Holdings (ASML -0.43%) and Applied Materials (AMAT -3.16%), or by owning chip designers like Nvidia (NVDA -2.86%) and Broadcom (AVGO -1.25%).
Over the past year, ASML and Applied Materials have had higher returns, but if you go back three years, Broadcom and Nvidia win this matchup.
But which stocks will win the AI cycle over the long term? I think chip designers have one advantage.
Image source: Getty Images.
Why semiconductor equipment makers are AI winners right now ASML Holding is a leader in advanced nodes, with a near monopoly on Extreme Ultraviolet (EUV) lithography systems for manufacturing the world's most complex AI chips. Applied Materials, for its part, provides much of the essential materials, engineering, and equipment for high-bandwidth (HBM) memory and transistors.
The share prices of both companies have soared over the past 12 months -- ASML is up 150%, and Applied Materials rose 200% -- as AI spending accelerates.
The companies are both in very good financial shape, with ASML's revenue rising 21% to about $10.8 billion and diluted non-GAAP earnings up 28% to $8.81 per share in the second quarter of 2026 (ended June 28). Applied Materials' sales rose 11% to $7.9 billion, and earnings popped 20% to $2.86 per share in the company's Q2 (ended April 26).
In short, both of these companies are the backbone of AI chip manufacturing, and their expertise in this space likely means they'll continue to benefit from continued AI investments.
That's very good news considering that capital expenditures (capex) among tech companies are estimated to top $1 trillion next year, up from about $705 billion this year.
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Chip designers are long-term AI winners Broadcom and Nvidia have benefited from AI by holding leading positions in designing some of the most-used AI processors.
Nvidia is the leading graphics processing unit (GPU) chip designer, with its processors accounting for 86% of the data center GPU market. Meanwhile, tech giants go to Broadcom when they need custom application-specific integrated circuits (ASICS) for AI, with Alphabet and OpenAI as two leading customers.
While Nvidia and Broadcom trail the share price returns of ASML and Applied Materials over the past year, they're the clear winners looking back over three years:
Image and data source: YCharts.
They're also massively profitable, and their revenue growth is very impressive. Nvidia's sales rose 85% in Q1 of fiscal year 2027 (ended April 26) to $81.6 billion, and its earnings jumped 140% to $1.87 per share. Broadcom's revenue spiked 48% to $21.2 billion, with earnings jumping 54% to $2.44 per share in Q2 2026 (ended May 3).
And, just like ASML and Applied Materials, the massive wave of AI spending will continue to benefit Broadcom and Nvidia.
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One potential advantage for chip designers As demand for AI chips has surged, Nvidia and Broadcom have raised prices, boosting their gross margins.
Nvidia's gross margins were 75%, and Broadcom's were 77% recently. No matter what business you're in, those are some enviable margins.
The semiconductor manufacturers don't have the same ability to earn extra profits, because it's harder to eke out more profits from expensive production and equipment. As such, ASML's most recent gross margins were about 54%, and Applied Materials' were about 50%.
Still good, but not as impressive as the chip designers.
All of this means Broadcom and Nvidia can tap into the AI boom in ways semiconductor manufacturers can't. And with the higher margins, the companies can likely ride out a potential slowdown in AI spending much more easily than the equivalent makers.
That doesn't mean ASML and Applied Materials won't continue to benefit from the AI boom, but it does give Nvidia and Broadcom a slight advantage in winning the AI boom over the long term.
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Stock to Watch: Cadence Design Systems (CDNS - Free Report) Based in San Jose, CA, Cadence Design Systems Inc. is a leader in the electronic system design space. The company’s Intelligent System Design strategy aids users to transform design concepts into reality by offering computational software, hardware and IP.
CDNS is a #3 (Hold) on the Zacks Rank, with a VGM Score of B.
Additionally, the company could be a top pick for growth investors. CDNS has a Growth Style Score of B, forecasting year-over-year earnings growth of 13.5% for the current fiscal year.
Nine analysts revised their earnings estimate upwards in the last 60 days for fiscal 2026. The Zacks Consensus Estimate has increased $0.16 to $8.10 per share. CDNS boasts an average earnings surprise of +4.9%.
With a solid Zacks Rank and top-tier Growth and VGM Style Scores, CDNS should be on investors' short list.
Semiconductor stocks have been pummeled recently, opening up a nice potential opportunity to buy these stocks while they are down. However, not all semiconductor stocks are created equal, so investors should be selective.
Let's look at one chip stock I'd buy, one I'd continue to hold, and one I'd sell.
Image source: The Motley Fool.
Buy: Nvidia If there is one chip stock to buy in this sell-off, it's Nvidia (NVDA +2.93%). Not only is the company the AI infrastructure leader, but its stock is also incredibly cheap and continues to grow rapidly.
Nvidia's biggest advantage is that it has created a wide moat with its CUDA software platform for AI model training. It is the dominant player in the space because, many years ago, it planted CUDA in places doing early AI research, making its proprietary software the main platform where most original AI code was written. But this wasn't the only prescient move Nvidia has made over the years; its 2020 acquisition of Mellanox laid the foundation for its networking platform.
CEO Jensen Huang's ability to steer Nvidia toward where the market is headed makes the stock an attractive long-term buy, and the recent "acquisitions" of Groq and SchedMD continue to demonstrate his foresight. With the semiconductor sector sell-off taking the stock to a forward P/E of 15 times fiscal 2028 (ending January 2028) analyst estimates, this is a stock to run out and buy.
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Hold: AMD Advanced Micro Devices (AMD -1.90%) is one of my favorite chip stocks, but its valuation is not nearly as attractive as that of Nvidia today. Still, the company has a massive growth opportunity ahead, which is why I want to keep holding onto the stock.
AMD is currently riding two powerful trends. The first is inference, where the company has started to make inroads. Inference tends to be more about fast memory access than raw computing power, and its chiplet design can be packaged with more memory. The company boldly made some large graphics processing unit (GPU) deals with OpenAI and Meta Platforms, giving up equity stakes in the process, but this has led to new deals with Anthropic and Microsoft, which will use its GPUs and Helios rack systems to handle some of their inference.
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The second big tailwind for AMD is agentic AI. The company is a leader in server central processing units (CPUs), and demand for high-performance CPUs is exploding as AI agents proliferate. The GPU-to-CPU ratio is projected to go from 8:1 for training to 4:1 for inference to 1:1 for agentic AI, leading AMD to forecast that this will be a $220 billion market in the coming years. The company is already making high-core CPUs specifically for agentic AI, which should help it maintain its lead in the space.
With AMD poised for massive growth from these two trends, it's a stock I want to continue to hold.
Sell: Intel One chip stock I'd be selling, however, is Intel (INTC -1.02%). The stock has had a great run, and last quarter it saw strong growth from its AI segment. However, this is a company that looks much more like a passenger than a leader.
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The data center CPU market has exploded, with demand and prices both on the rise. This led hyperscalers to seek as many CPUs as they could, and Intel just happened to be in the right place at the right time. Before that, though, it was losing share to AMD and ARM-based CPUs in the data center. At the same time, its foundry unit continues to be a drag, reporting significant losses.
Once a cheap stock, that's no longer the case, with a big run, and I'd be taking gains and selling the stock.
Chip stocks rallied this week on a wave of strong tech earnings, and investors rewarded semiconductor ETFs with a rush of new cash. Three funds tracking the chip sector ranked among those pulling in the most new money, according to FactSet flow data.
Key Takeaways: Strong Big Tech earnings from Microsoft and Amazon helped drive chip stocks higher. SMH concentrates far more in Nvidia and TSM than the broader SOXX. SOXL’s 3x leverage means bigger swings, built for trading, not holding. Big Tech earnings fueled the rally. Microsoft Corp. (MSFT) jumped 16% Thursday after posting stronger-than-expected growth in its Azure cloud business, CNBC reported.
Meanwhile, Amazon.com, Inc. (AMZN) surged 11% Friday on a second-quarter revenue beat tied to its own cloud strength, according to CNBC. Both reports pointed to heavy spending on AI infrastructure, even as Treasury yields climbed to multiyear highs.
See more: Semiconductor Crossroads: Healthy Consolidation or Deeper Repricing?
The iShares Semiconductor ETF (SOXX), the VanEck Semiconductor ETF (SMH) and the Direxion Daily Semiconductor Bull 3X ETF (SOXL) all capture the same semiconductor trade, but the similarities end there. Index construction, concentration and leverage create different risk profiles for investors choosing among them.
All that AI spending needs chips to run, and semiconductor stocks moved with the rally this week. Shares of SOXX jumped 5.4% Friday, building on an 8.5% rally Thursday, its best day since April 9, 2025, according to CNBC. Micron Technology, Inc. (MU) and Advanced Micro Devices, Inc. (AMD) led the advance.
SOXX led the group with about $4.08 billion in new cash this week. The fund holds $41.6 billion in assets and charges a 0.34% expense ratio, VettaFi data show. Since launching in July 2001, the fund has tracked a modified market-cap-weighted index of 30 U.S.-listed chip companies.
That modified cap-weighting keeps any single stock from dominating the portfolio. AMD is SOXX’s largest holding at 8.6%, followed by Nvidia Corp. (NVDA) at 8.4%, Micron at 8.2% and Broadcom Inc. (AVGO) at 7.9%, according to VettaFi. Together, the top 10 holdings make up about 61% of assets.
A Different Take on the Semiconductor Trade SMH added about $3.3 billion in new cash this week. The fund holds $63.3 billion in assets and charges a 0.35% expense ratio, VettaFi data show. Since launching in May 2000, it has tracked a narrower, market-cap-weighted index of just 25 stocks.
That structure hands outsized influence to the industry’s biggest names. Nvidia alone accounts for 20.8% of SMH’s portfolio, followed by Taiwan Semiconductor Manufacturing Co. (TSM) at 9.6%, Broadcom at 6.6% and AMD at 5.7%, according to VettaFi. Together, the top 10 holdings represent about 72% of assets, well above SOXX’s level.
SOXL drew about $2.4 billion in new cash this week, the smallest haul of the three. The $15.4 billion fund launched in March 2010 and charges a 0.75% expense ratio. It uses swaps and futures to chase 300% of SOXX’s daily index move, according to VettaFi. AMD and Nvidia remain the fund’s largest direct holdings, though, at 4.9% and 4.8%.
That leverage cuts both ways. SOXL has fallen 15.5% so far in 2026, compared with declines of roughly 4% for SOXX and SMH, according to VettaFi performance data. The fund leans on swaps and futures rather than holding stocks outright. That structure means daily compounding can push returns well away from three times the index over time, better suited to short-term trades than long-term holding.
For more news, information, and analysis, visit the Equity ETF Content Hub.
Cadence Design Systems (CDNS - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Shares of this maker of hardware and software products for validating chip designs have returned -10.8% over the past month versus the Zacks S&P 500 composite's -0.5% change. The Zacks Computer - Software industry, to which Cadence belongs, has gained 15.2% over this period. Now the key question is: Where could the stock be headed in the near term?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Revisions to Earnings EstimatesHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
For the current quarter, Cadence is expected to post earnings of $2.04 per share, indicating a change of +5.7% from the year-ago quarter. The Zacks Consensus Estimate has changed +6.9% over the last 30 days.
The consensus earnings estimate of $8.1 for the current fiscal year indicates a year-over-year change of +13.5%. This estimate has changed +2.7% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $9.4 indicates a change of +16% from what Cadence is expected to report a year ago. Over the past month, the estimate has changed +1.1%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Cadence is rated Zacks Rank #3 (Hold).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
For Cadence, the consensus sales estimate for the current quarter of $1.61 billion indicates a year-over-year change of +20.2%. For the current and next fiscal years, $6.3 billion and $7.09 billion estimates indicate +19% and +12.5% changes, respectively.
Last Reported Results and Surprise HistoryCadence reported revenues of $1.58 billion in the last reported quarter, representing a year-over-year change of +24.2%. EPS of $2.11 for the same period compares with $1.65 a year ago.
Compared to the Zacks Consensus Estimate of $1.58 billion, the reported revenues represent a surprise of +0.52%. The EPS surprise was +2.93%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Cadence is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Cadence. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
Key Takeaways Cadence's Q2 revenues rose 24.2% to $1.584 billion, while backlog reached a record $8.1 billion.AI demand, stronger bookings and hardware traction supported double-digit growth across all product groups.Cadence raised 2026 guidance for revenue to $6.26-$6.34 billion and EPS to $8.05-$8.15. Cadence Design Systems (CDNS - Free Report) , a well-known player in the electronic design automation (“EDA”) space, recently reported strong second-quarter 2026 results with a record backlog that underscores sustained demand for its solutions.
Revenues of $1.584 billion beat the Zacks Consensus Estimate by 0.5% and increased 24.2% year over year. The figure was within the management’s guided range of $1.555-$1.595 billion. All the product groups witnessed double-digit growth. Non-GAAP earnings per share (EPS) of $2.11 beat the Zacks Consensus Estimate by 2.9%, increased 27.9% year over year.
One of the standout factors of this quarter was Cadence’s expanding backlog, which stood at $8.1 billion at the quarter-end. Backlog growth was supported by strong bookings momentum, rising significantly in the first half, highlighting the strength of underlying demand trends.
The Zacks Consensus Estimate for order backlog stood at $7.68 billion.
Record Backlog Underscores AI TailwindsAI is driving a major transformation in semiconductor and system design. Cadence is deeply integrated into this shift. Design activity across several verticals, especially data centers and automotive, has been robust due to AI, hyperscale computing and 5G. The focus on Generative AI, Agentic AI and Physical AI has been driving an exponential increase in computing demand and semiconductor innovation. Customers have been significantly increasing their R&D budgets in AI-driven automation.
On the recent earnings call, Cadence added that it is witnessing momentum on both “AI for Design” and “Design for AI” fronts.
The company cited agentic AI as a durable tailwind. Cadence expects agentic tools to drive higher EDA consumption and usage across its platform as customers run more simulations, verification and implementation cycles, thereby expanding the addressable market. Management highlighted “strong early traction” for its AI Super-Agent portfolio.
Cadence’s hardware business also contributed to backlog growth. The demand for new hardware systems continued to gain traction, driven by AI/HPC customers. Apart from hardware, demand for digital full-flow solutions was steady, with expanded adoption of the Tempus and Certus sign-off tools within the Core EDA segment. It added 12 new logos in the reported quarter and expanded business with several AI clients.
Deepening its strategic partnerships with Samsung, Intel, TSMC and OpenAI, among others bodes well.
Overall, Cadence’s record backlog underscores strong demand visibility and reinforces confidence in its growth trajectory. With AI acting as a key catalyst and customer engagements deepening across segments, the company appears well-positioned to sustain momentum.
CDNS’ Upbeat Outlook Cadence raised its full-year 2026 revenue outlook to a band of $6.26-$6.34 billion, compared with the earlier guided range of $6.125-$6.225 billion. The Zacks Consensus Estimate is currently pinned at $6.29 billion.
Non-GAAP EPS for 2026 is now expected to be between $8.05 and $8.15, compared with the earlier guided range of $7.85 to $7.95. The Zacks Consensus Estimate is currently pinned at $8.03 per share.
In the past year, shares have lost 8.7% compared with Computer-Software industry’s decline of 31.6%
Other Stocks to Consider in the Same SpaceSome better-ranked stocks worth consideration are Keysight Technologies, Inc (KEYS - Free Report) , Synopsys (SNPS - Free Report) and Commvault Systems (CVLT - Free Report) . All stocks carry a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for KEYS’ fiscal 2026 EPS is pegged at $10.17, unchanged in the past 30 days. Keysight’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 9.46%. Shares of Keysight have gained 81% in the past year.
The Zacks Consensus Estimate for SNPS’ fiscal 2026 EPS is pegged at $14.75, unchanged in the past 30 days. Synopsys’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, while missing once, with the average surprise being 0.88%. Shares of Synopsys have lost 41% in the past year.
The Zacks Consensus Estimate for CVLT’s fiscal 2027 EPS is pegged at $5.24, up two cents in the past 30 days. Commvault’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, while missing once, with the average surprise of 13.49%. Shares of Commvault have declined 36.6% in the past year.
Amundi increased its holdings in shares of Cadence Design Systems, Inc. (NASDAQ:CDNS – Free Report) by 3.8% in the first quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The fund owned 2,060,334 shares of the software maker’s stock after buying an additional 75,492 shares during the period. Amundi owned 0.75% of Cadence Design Systems worth $572,488,000 at the end of the most recent quarter.
Several other large investors have also bought and sold shares of the business. Vanguard Group Inc. grew its position in shares of Cadence Design Systems by 1.1% during the 4th quarter. Vanguard Group Inc. now owns 27,231,070 shares of the software maker’s stock worth $8,511,888,000 after buying an additional 307,753 shares during the period. State Street Corp grew its holdings in Cadence Design Systems by 1.1% during the fourth quarter. State Street Corp now owns 12,603,368 shares of the software maker’s stock valued at $3,939,561,000 after purchasing an additional 135,206 shares during the period. Geode Capital Management LLC grew its holdings in Cadence Design Systems by 1.2% during the fourth quarter. Geode Capital Management LLC now owns 7,627,272 shares of the software maker’s stock valued at $2,378,707,000 after purchasing an additional 92,152 shares during the period. Norges Bank bought a new stake in Cadence Design Systems in the fourth quarter valued at approximately $1,352,922,000. Finally, Van ECK Associates Corp increased its stake in Cadence Design Systems by 11.9% in the fourth quarter. Van ECK Associates Corp now owns 3,534,180 shares of the software maker’s stock valued at $1,104,714,000 after purchasing an additional 376,654 shares in the last quarter. 84.85% of the stock is currently owned by institutional investors and hedge funds.
Cadence Design Systems Price Performance Shares of NASDAQ CDNS opened at $333.30 on Thursday. The company has a fifty day moving average price of $373.55 and a 200 day moving average price of $329.91. The firm has a market cap of $91.93 billion, a PE ratio of 66.26, a PEG ratio of 4.07 and a beta of 1.15. The company has a current ratio of 1.74, a quick ratio of 1.32 and a debt-to-equity ratio of 0.36. Cadence Design Systems, Inc. has a 1-year low of $262.75 and a 1-year high of $416.69.
Cadence Design Systems (NASDAQ:CDNS – Get Free Report) last released its quarterly earnings results on Monday, July 27th. The software maker reported $2.11 earnings per share (EPS) for the quarter, beating the consensus estimate of $2.05 by $0.06. The firm had revenue of $1.58 billion for the quarter, compared to the consensus estimate of $1.58 billion. Cadence Design Systems had a return on equity of 27.98% and a net margin of 23.60%.The company’s revenue for the quarter was up 24.2% on a year-over-year basis. During the same quarter last year, the business posted $1.65 EPS. Cadence Design Systems has set its FY 2026 guidance at 8.050-8.150 EPS and its Q3 2026 guidance at 2.010-2.070 EPS. Research analysts predict that Cadence Design Systems, Inc. will post 6.25 earnings per share for the current fiscal year.
Insiders Place Their Bets In other news, VP Paul Scannell sold 7,081 shares of Cadence Design Systems stock in a transaction that occurred on Monday, June 1st. The shares were sold at an average price of $393.91, for a total value of $2,789,276.71. Following the sale, the vice president directly owned 32,181 shares in the company, valued at $12,676,417.71. This trade represents a 18.04% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Ita M. Brennan sold 180 shares of the business’s stock in a transaction on Wednesday, June 10th. The stock was sold at an average price of $387.45, for a total transaction of $69,741.00. Following the completion of the sale, the director directly owned 8,004 shares in the company, valued at approximately $3,101,149.80. This represents a 2.20% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 157,057 shares of company stock worth $60,272,277 in the last 90 days. Company insiders own 0.49% of the company’s stock.
Key Stories Impacting Cadence Design Systems Here are the key news stories impacting Cadence Design Systems this week:
Positive Sentiment: Cadence reported second-quarter adjusted earnings of $2.11 per share, above the $2.05 consensus estimate, while revenue reached approximately $1.58 billion, up 24.2% year over year and broadly in line with expectations. Cadence Q2 Earnings Top Estimates, 2026 Revenue Outlook Raised Positive Sentiment: Management raised its 2026 outlook, including full-year adjusted EPS guidance of $8.05 to $8.15, and indicated roughly 19% revenue growth. A record $8.1 billion backlog provides visibility into future results. Cadence signals 19 percent 2026 revenue growth Positive Sentiment: Demand for Cadence’s electronic-design automation tools is broadening as customers develop AI and “agentic AI” systems, increasing usage of core design software and supporting growth across the company’s portfolio. Cadence rises after Q2 beat Positive Sentiment: Several analysts raised their price targets to $420, including Bank of America, Rosenblatt Securities and Robert W. Baird, while maintaining positive ratings. Needham reaffirmed its buy rating. Analyst price-target changes Neutral Sentiment: Piper Sandler raised its target to $349 but retained a neutral rating, suggesting more limited near-term upside than other analysts. Piper Sandler rating update Negative Sentiment: Despite the strong fundamentals, CDNS trades at a high valuation—about 66 times earnings and a PEG ratio near 4—leaving the stock vulnerable to profit-taking or a “sell-the-news” reaction after its results and rally. Its shares are also below the 50-day moving average, indicating continued near-term technical pressure. Analyst Ratings Changes A number of equities analysts have recently weighed in on CDNS shares. Oppenheimer reissued a “market perform” rating and set a $300.00 price target on shares of Cadence Design Systems in a research report on Tuesday. Bank of America upped their price objective on shares of Cadence Design Systems from $400.00 to $420.00 and gave the company a “buy” rating in a research report on Tuesday. Needham & Company LLC reaffirmed a “buy” rating and set a $400.00 price objective on shares of Cadence Design Systems in a research note on Tuesday. Wells Fargo & Company lifted their target price on Cadence Design Systems from $400.00 to $425.00 and gave the stock an “overweight” rating in a report on Tuesday, May 26th. Finally, Stifel Nicolaus lifted their target price on Cadence Design Systems from $395.00 to $432.00 and gave the stock a “buy” rating in a report on Tuesday, June 9th. Thirteen investment analysts have rated the stock with a Buy rating and three have issued a Hold rating to the company. According to data from MarketBeat, the stock presently has an average rating of “Moderate Buy” and an average target price of $405.69.
Check Out Our Latest Report on Cadence Design Systems
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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I maintain my buy rating on Cadence Design Systems (CDNS) as Q2 results affirm a robust, diversified growth trajectory. Recurring revenue is accelerating, now less dependent on hardware, with high-teens to ~20% growth excluding Hexagon. Agentic AI licenses and Intel's DTCO partnership provide new monetization layers and multi-year expansion opportunities.
Key Takeaways Cadence's Q2 revenues rose 24.2% to $1.584 billion, while non-GAAP EPS increased 27.9% to $2.11.Record backlog reached $8.1 billion as strong bookings and AI demand supported broad-based growth.Cadence raised its 2026 revenue outlook to $6.26-$6.34 billion and EPS guidance to $8.05-$8.15. Cadence Design Systems (CDNS - Free Report) delivered a strong second-quarter 2026 results, driven by broad-based demand for its AI-oriented portfolio amid robust design activity and new system architectures across hyperscaler infrastructure and physical AI. Non-GAAP earnings per share (EPS) of $2.11 beat the Zacks Consensus Estimate by 2.9%, increased 27.9% year over year and topped management’s guided range of $2.02 to $2.08.
Revenues of $1.584 billion beat the Zacks Consensus Estimate by 0.5% and increased 24.2% year over year. The figure was within the management’s guided range of $1.555-$1.595 billion. All the product groups witnessed double-digit growth.
On the earnings call, the company cited agentic AI as a durable tailwind. Cadence expects agentic tools to drive higher EDA consumption and usage across its platform as customers run more simulations, verification and implementation cycles, thereby expanding the addressable market. Management highlighted “strong early traction” for its AI Super-Agent portfolio.
A standout metric was a record backlog of $8.1 billion, driven by strong bookings.
Price Performance
Image Source: Zacks Investment Research
Strong quarterly performance and accelerating AI demand led to a raise in its 2026 revenue outlook.
Cadence raised its full-year 2026 revenue outlook to a band of $6.26-$6.34 billion, compared with the earlier guided range of $6.125-$6.225 billion. The Zacks Consensus Estimate is currently $6.2 billion.
Non-GAAP EPS for 2026 is now expected to be between $8.05 and $8.15, compared with the earlier guided range of $7.85 to $7.95. The Zacks Consensus Estimate is currently pinned at $7.94 per share.
CDNS stock was up 2.9% in the post-market trading yesterday and is up 3.4% in the pre-market trading today. The stock has lost 7.5% compared with the Computer - Software industry’s 30.6% decline in the past year.
CDNS’ Segment PerformanceProduct & Maintenance revenues (90.3% of total revenues) of $1.431 billion rose 22.3% year over year. Services revenues (9.7%) of $154 million jumped 46.7% year over year.
Recurring revenues comprised 78% of total revenues, while the remainder was upfront revenues.
The Americas contributed 43% of revenues, while China accounted for 15%, Other Asia 20%, Europe, Middle East and Africa 15% and Japan 7%, pointing to diversified demand across geographies.
Product-wise, Core EDA, Intellectual Property (“IP”) and Systems Design & Analysis accounted for 68%, 15% and 17% of total revenues, respectively.
The System Design & Analysis business, up 37% in the second quarter, is gaining from higher demand for Allegro X AI, 3D-IC and BETA CAE solutions. Management noted that the integration of Hexagon's D&E business was “progressing well” with some deals closed with key clients in the quarter.
Core EDA business, which includes Custom IC, Digital IC and Functional Verification, experienced 18% year-over-year growth.
The demand for new hardware systems continued to gain traction, driven by AI/HPC customers. Apart from hardware, demand for digital full-flow solutions was steady, with expanded adoption of the Tempus and Certus sign-off tools. It added 12 new logos in the reported quarter as well as expanded business with several AI clients.
The IP business was up 40% year over year in the second quarter. The company is witnessing higher demand for its Star IP portfolio across AI and HPC applications, including HBM, PCIe, UCIe and LPDDR6.
Total non-GAAP costs and expenses increased 18.4% year over year to $863 million.
However, non-GAAP operating margin expanded 270 bps on a year-over-year basis to 45.5%.
CDNS’ Balance Sheet & Cash FlowAs of June 30, 2026, CDNS had cash and cash equivalents of $1.44 billion compared with $1.407 billion as of March 31, 2026.
Long-term debt was $2.482 billion, compared with $2.481 billion as of March 31, 2026.
Cadence generated an operating cash flow of $635 million in the reported quarter compared with the prior quarter’s $356 million. Free cash flow was $582 million compared with $307 million in the previous quarter.
The company repurchased its shares worth $200 million in the second quarter.
CDNS’ OutlookNon-GAAP operating margin for 2026 is now forecasted to be in the band of 43.75% to 44.75%, compared with the range of 43.5% to 44.5% guided earlier.
Also, operating cash flow is expected to be $2 billion compared with $1.875 billion to $1.975 billion projected earlier. CDNS expects to utilize at least 50% of its free cash flow to repurchase shares in 2026.
For the third quarter of 2026, revenues are estimated to be $1.595-$1.625 billion. The company reported sales of $1.55 billion in the year-ago quarter.
Non-GAAP EPS is anticipated to be between $2.01 and $2.07. CDNS reported an EPS of $1.92 in the year-ago quarter.
Non-GAAP operating margin is estimated to be between 43.5% and 44.5% in the third quarter.
CDNS’ Zacks RankCadence currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Performance of Other Companies in the Same SpaceSAP SE (SAP - Free Report) reported second-quarter 2026 non-IFRS EPS of €1.59 ($1.85), which increased 6% from the year-ago quarter. The Zacks Consensus Estimate was $2. Despite macroeconomic uncertainty, SAP reported total revenues on a non-IFRS basis of €9.9 billion ($11.5 billion), which increased 9% year over year (up 11% at constant currency or cc). The Zacks Consensus Estimate was pinned at $11.4 billion.
Shares of SAP have declined 40.5% in the past year.
Pegasystems (PEGA - Free Report) reported second-quarter fiscal 2026 revenues of $420.7 million, up 9.4% year over year, but missed the consensus mark by 1.8%. Pega Cloud momentum was a bright spot, with Pega Cloud annual contract value rising 22% year over year. Pega Cloud revenues jumped 28% year over year to $213.9 million and accounted for 51% of quarterly revenues.
Shares of PEGA have declined 52.7% in the past year.
Progress Software Corporation (PRGS - Free Report) reported second-quarter fiscal 2026 results wherein revenues came in at $253 million, up 7% year over year and 6% on a constant currency (cc) basis. ARR of $868 million inched up 2% year over year on a cc basis. PRGS reported a 16% year-over-year increase in non-GAAP earnings per share, which stood at $1.62.
Cadence Design Systems (CDNS), a semiconductor-design software company, jumped more than 5% in Monday's extended trading after raising its annual revenue and pr
Key Takeaways Cadence raised its 2026 revenue outlook to $6.26B-$6.34B after broad second-quarter strength.Agentic AI products are gaining early traction while increasing use of Cadence's core design engines.Core EDA rose 18%, IP grew more than 40%, and System Design and Analysis advanced 37%. Cadence Design Systems, Inc. (CDNS - Free Report) used its second-quarter 2026 earnings call to frame agentic AI as both a new product opportunity and a driver of heavier use of its established design engines.
Management also raised the full-year outlook, citing strength across core EDA, IP, hardware and System Design and Analysis rather than reliance on one product or customer.
CDNS Raises the 2026 OutlookJohn Wall, senior vice president and chief financial officer, said Cadence now expects 2026 revenues of $6.26 billion to $6.34 billion. The midpoint implies 19% growth.
Non-GAAP operating margin is projected at 43.75% to 44.75%, while non-GAAP earnings are expected at $8.05 to $8.15 per share. Operating cash flow is targeted at about $2 billion.
For the third quarter, management guided to revenues of $1.595 billion to $1.625 billion and non-GAAP earnings of $2.01 to $2.07 per share. The outlook assumes export-control regulations remain substantially similar through year-end.
Cadence Positions Agents as a Demand AcceleratorAnirudh Devgan, president and chief executive officer, described Cadence’s “Three-Layer Cake” as compute and data, physically accurate design engines, and AI agents that orchestrate workflows.
He argued that agents expand the design alternatives explored and repeatedly invoke Cadence tools. That creates monetization through agent licenses and greater use of underlying software.
Wall said customer activity is advancing through evaluations, pilots and early deployments. He cautioned that guidance does not assume a sudden step-up in agentic AI revenues.
CDNS Sees Early Product TractionDevgan said ChipStack has more than 20 customer engagements and is in production across multiple chip designs. ViraStack has more than 25 engagements, with disclosed productivity gains ranging from twofold to tenfold.
AuraStack extends the portfolio into PCB and advanced packaging, while InnoStack targets advanced-node system-on-chip design. Some public customer examples have shown improvements as high as 40 times.
A Mizuho analyst pressed management on adoption speed. Devgan called early add-on activity encouraging but emphasized that the products have been in the market for only about six months.
Cadence Broadens Its Growth EnginesCore EDA revenues increased 18% year over year, IP grew more than 40%, and System Design and Analysis advanced 37%.
Hardware posted another record quarter and added 12 new customers. Wall said demand remains strongest among AI and high-performance computing customers, with supply capacity limiting deliveries.
Second-quarter revenues came in at $1,584.5 million, which beat the Zacks Consensus Estimate of $1,576.2 million. Non-GAAP earnings of $2.11 per share also topped the $2.05 consensus mark.
CDNS Deepens Foundry and Customer TiesDevgan highlighted a multiyear Intel engagement spanning the 14A process, design-technology co-optimization, EDA and IP. He said the agreement is incremental to existing Intel business, with most benefits expected beyond 2026.
Management also pointed to stronger relationships with Samsung and continued collaboration with TSMC. Devgan said Cadence’s prior relative weakness at Intel and Samsung has improved, particularly in digital implementation, verification and signoff.
In response to a Deutsche Bank analyst, Wall said second-half margins include targeted spending on Intel opportunities and Hexagon integration. He characterized that spending as investment rather than deterioration in the operating model.
Cadence Defends the EDA MoatA Needham analyst asked whether powerful language models could bypass commercial EDA tools and generate designs directly for fabrication.
Devgan rejected that scenario, arguing that physically accurate tools and verified engineering data remain essential. He said customer choice is more apt to expand at the language-model layer than replace core simulation engines.
A Baird analyst also asked about open-source agents. Devgan said customers may build their own orchestration, but mission-critical work still depends on differentiated knowledge graphs, deep tool access and specialized hardware.
CDNS Enters the Second Half With Broad MomentumManagement’s tone was confident but measured. Devgan emphasized stronger design activity, share gains and agentic AI as separate supports for growth.
Wall said recurring revenues rose about 24%, including roughly four percentage points from Hexagon, while add-on demand remained strong in a comparatively light renewal year.
Zacks Signals for CadenceCDNS carries a Zacks Rank #3 (Hold), with a Value Score of F, Growth and Momentum Scores of C and a VGM Score of D. That combination indicates a neutral earnings-revision signal alongside weaker style characteristics. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks Style Scores complement the Rank, with A and B grades viewed more favorably than lower grades. The Zacks Rank can change as analysts revise estimates following the reported results.
Cadence Design Systems Inc (NASDAQ:CDNS) reported upbeat financial results for the second quarter of 2026 on Monday.
Cadence Design Systems reported second-quarter revenue of $1.584 billion, beating analyst estimates of $1.577 billion. The company reported second-quarter adjusted earnings of $2.11 per share, beating estimates of $2.06 per share, according to Benzinga Pro.
"Cadence is leading the agentic AI transformation in semiconductor design with a healthy environment. We are uniquely positioned to capitalize on this massive TAM expansion opportunity as the only provider with agentic solutions spanning the full electronic system design flow," said Anirudh Devgan, president and CEO of Cadence Design Systems.
The company raised its full-year revenue guidance from a range of $6.13 billion to $6.23 billion to a new range of $6.26 billion to $6.34 billion, versus estimates of $6.21 billion. Cadence also raised its full-year adjusted earnings guidance from a range of $7.85 to $7.95 per share to an updated range of $8.05 to $8.15 per share, versus estimates of $7.96 per share.
Cadence Design shares gained 3.4% to $349.97 in pre-market trading.
These analysts made changes to their price targets on Cadence Design following earnings announcement.
Piper Sandler analyst Clarke Jeffries maintained the stock with a Neutral and raised the price target from $325 to $349. Baird analyst Joe Vruwink maintained the stock with an Outperform rating and raised the price target from $415 to $420. Needham analyst Charles Shi reiterated Cadence Design with a Buy and maintained a $400 price target. Considering buying CDNS stock? Here’s what analysts think:
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Shares Fall, Targets Rise—Markets and Analysts Diverge on SynopsysCadence Design Systems NASDAQ: CDNS reported second-quarter 2026 results that exceeded its guidance, supported by demand for AI-driven design tools and broad-based growth across its businesses. The company raised its full-year outlook, citing accelerating design activity, record backlog and continued customer investment in AI and high-performance computing.
Revenue for the second quarter rose 24% year over year to $1.584 billion. Cadence reported GAAP operating margin of 28.4% and non-GAAP operating margin of 45.5%. GAAP earnings per share were $1.33, while non-GAAP EPS was $2.11.
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3 Companies Quietly Essential to Data Center and AI OperationsCadence ended the quarter with a record backlog of $8.1 billion. Operating cash flow was $635 million, and the company repurchased $200 million of its shares during the quarter. Cash totaled $1.44 billion, while debt outstanding had a principal value of $2.5 billion.
Full-Year Outlook Raised Chief Executive Officer Anirudh Devgan said the company’s results reflected growing demand for solutions used in both “design for AI” and “AI for design.” He said Cadence now expects 19% revenue growth for 2026, with higher profitability as the company becomes more strategically involved in customer design programs.
Beyond NVIDIA: Picks-and-Shovels AI Plays with Strong MomentumFor the full year, Cadence expects:
Revenue of $6.26 billion to $6.34 billion. GAAP operating margin of 27.75% to 28.75%. Non-GAAP operating margin of 43.75% to 44.75%. GAAP EPS of $4.76 to $4.86. Non-GAAP EPS of $8.05 to $8.15. Operating cash flow of approximately $2 billion. At the midpoint of its outlook, Cadence expects revenue growth of 19%, non-GAAP operating margin of 44.25% and non-GAAP EPS of $8.10. The forecast assumes that existing export-control regulations remain substantially similar through the remainder of the year, according to Chief Financial Officer John Wall.
For the third quarter, Cadence forecast revenue of $1.595 billion to $1.625 billion and non-GAAP EPS of $2.01 to $2.07.
Agentic AI Seen Expanding Design Demand Devgan emphasized Cadence’s approach to agentic AI, which combines computing and data, physics-based design and simulation tools, and AI agents that orchestrate engineering workflows. He said autonomous agents can expand the number of design alternatives explored and invoke Cadence’s underlying tools more frequently, creating a potential long-term expansion of the company’s addressable market.
“Agentic AI is a demand accelerator for Cadence,” Devgan said during prepared remarks.
Cadence introduced AuraStack AI Super Agent for printed circuit board and advanced packaging design, which the company said can provide up to 15 times higher productivity and reduce time to market by up to half. Its ChipStack AI Super Agent has more than 20 customer engagements and is deployed in production across multiple chip designs, Devgan said. Cadence also cited customer results of more than 40 times faster RTL validation in one advanced-node design, reducing a typical five-week verification cycle to less than a day.
ViraStack, the company’s agentic AI offering for analog and custom design, has more than 25 customer engagements and has produced productivity improvements ranging from two times to 10 times in customer use cases, according to Devgan. He said InnoStack is also gaining adoption for advanced-node system-on-chip design, including a collaboration with Rapidus targeting up to two times faster design turnaround.
Wall said the company is seeing more customer evaluations, pilots and early deployments. However, he said Cadence is not assuming a “sudden step function” from agentic AI in its guidance, even as it expects monetization through both new workflow products and increased usage of core design engines.
Growth Across Product Groups Cadence said every product group posted double-digit year-over-year growth in the quarter. The intellectual property business grew more than 40%, fueled by demand in AI and HPC applications for PCIe, UCIe, HBM and LPDDR6 IP. Devgan said most of that growth was organic and attributed the performance to stronger IP quality, a focus on leading-node and AI-related IP, and a broader set of foundry relationships.
The company also announced a multi-year collaboration with Intel centered on enabling its 14A process technology. The arrangement includes design IP, agentic AI-based electronic design automation tools, and design-technology co-optimization work for HPC and mobile designs. Devgan described the agreement as incremental to Cadence’s existing Intel business, with some benefit this year and most of the contribution expected over multiple years.
Cadence expanded its collaboration with Samsung Foundry on two-nanometer and 3D IC technologies as well. Devgan said the company’s relationships with Intel and Samsung have improved after Cadence had historically been stronger in the TSMC ecosystem.
Core EDA revenue grew 18% year over year, led by adoption of AI tools and expanded use of digital implementation and sign-off products. The company also reported a significant competitive analog-design win for its Spectre platform and several production wins for its Spectre FX FastSPICE simulator.
Hardware and Systems Design Strength Cadence’s hardware business delivered another record quarter, driven by demand for Palladium Z3 and Protium X3 systems. Wall said demand remains particularly strong among AI and HPC customers, including hyperscalers and semiconductor companies, and that hardware remains supply-constrained rather than demand-constrained.
“We’re building the systems as quickly as we can to deliver against the backlog,” Wall said. He added that Cadence expects 2026 to be another record year for hardware.
System design and analysis revenue increased 37% year over year. Cadence said adoption of its advanced packaging and PCB tools is increasing as AI system complexity grows. The company also cited customer interest in combining electrical, computational fluid dynamics and structural simulation capabilities, including applications related to physical AI.
Wall said the integration of Hexagon’s design and engineering business is progressing as expected and contributed to systems design and analysis growth. He noted that Cadence expects targeted investments in the second half, including integration work and investments tied to opportunities such as Intel, to modestly reduce second-half margins compared with the first half. He characterized the spending as deliberate investment rather than deterioration in the company’s underlying business model.
Recurring revenue grew about 24% year over year in the second quarter, Wall said, supported by core EDA growth, renewals, market-share gains and add-on business. Hexagon contributed roughly four percentage points to recurring revenue growth, he said. Cadence continues to expect its full-year revenue mix to be approximately 80% recurring and 20% upfront.
About Cadence Design Systems (NASDAQ:CDNS)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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Cadence Design Systems, Inc. (CDNS) Q2 2026 Earnings Call July 27, 2026 5:00 PM EDT
Company Participants
Richard Gu - Vice President of Investor Relations
Anirudh Devgan - CEO, President & Director
John Wall - Senior VP & CFO
Conference Call Participants
Joseph Quatrochi - Wells Fargo Securities, LLC, Research Division
Joseph Vruwink - Robert W. Baird & Co. Incorporated, Research Division
Vivek Arya - BofA Securities, Research Division
Sitikantha Panigrahi - Mizuho Securities USA LLC, Research Division
James Schneider - Goldman Sachs Group, Inc., Research Division
Harlan Sur - JPMorgan Chase & Co, Research Division
Yu Shi - Needham & Company, LLC, Research Division
Lee Simpson - Morgan Stanley, Research Division
Jason Celino - KeyBanc Capital Markets Inc., Research Division
Gianmarco Conti - Deutsche Bank AG, Research Division
Ruben Roy - Stifel, Nicolaus & Company, Incorporated, Research Division
Wei Chia - Citigroup Inc., Research Division
Jay Vleeschhouwer - Griffin Securities, Inc., Research Division
Joshua Tilton - Wolfe Research, LLC
Gary Mobley
Presentation
Operator
Ladies and gentlemen, good afternoon. My name is Abby, and I will be your conference operator today. At this time, I would like to welcome everyone to the Cadence Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Thank you.
And I will now turn the call over to Richard Gu, Vice President of Investor Relations for Cadence. Please go ahead.
Richard Gu
Vice President of Investor Relations
Thank you, operator. I would like to welcome everyone to our second quarter of 2026 earnings conference call. I'm joined today by Anirudh Devgan, President and Chief Executive Officer; and John Wall, Senior Vice President and Chief Financial Officer. The webcast of this call and a copy of today's prepared remarks will be available on our website, cadence.com.
Today's discussion will contain forward-looking statements, including our outlook on future business and operating results. Due to risks and uncertainties, actual results may differ materially from those projected
Cadence Design Systems Inc (CDNS) released its 8-K filing on July 27, 2026, announcing robust financial results for the second quarter of 2026. The company demo
The logo of Cadence Design Systems is pictured outside the company's offices in San Jose, California, U.S., January 31, 2020. Picture taken January 31, 2020. REUTERS/Stephen Nellis Purchase Licensing Rights, opens new tab
July 27 (Reuters) - Cadence Design Systems (CDNS.O), opens new tab raised its annual revenue and profit forecasts on Monday, banking on robust demand for its AI-powered chip and system design software.
Shares of the company rose more than 5% in extended trading.
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The company's electronic design automation (EDA) tools are used to design and validate semiconductors and electronic systems.
Here are some details:
Demand has risen sharply for Cadence's software as chipmakers and technology companies develop increasingly sophisticated systems-on-chip (SoCs) and AI accelerators.
Its customers include AI-chip leader Nvidia (NVDA.O), opens new tab and iPhone-maker Apple (AAPL.O), opens new tab.
Cadence now expects 2026 revenue to be between $6.26 billion and $6.34 billion, up from its prior projection of $6.13 billion to $6.23 billion.
On average, analysts were expecting annual revenue of $6.21 billion, according to data compiled by LSEG.
Annual adjusted profit is expected to be between $8.05 and $8.15 per share, up from its previous forecast of $7.85 to $7.95 and above estimates of $7.96.
Earlier in the month, Cadence launched an AI "super agent" called AuraStack that lets engineers describe their goals in plain language and then plans and carries out the work using the company's existing software tools to lay out and virtually test circuit designs.
Cadence's second-quarter revenue rose 24.2% to $1.584 billion, largely in line with estimates. Adjusted profit came in at $2.11 per share, compared with estimates of $2.05.
Quarter-end backlog stood at $8.1 billion, with $4.2 billion expected to be recognized as revenue within the next 12 months.
Reporting by Anhata Rooprai in Bengaluru; Editing by Diti Pujara and Sriraj Kalluvila
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