Track market-moving stories before they get noisy

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

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

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

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

Price Performance
Image Source: Zacks Investment Research

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Posted by Defense World Staff on Jul 24th, 2026

Arrowstreet Capital Limited Partnership increased its position in Cadence Design Systems, Inc. (NASDAQ:CDNS – Free Report) by 232.1% during the first quarter, according to its most recent Form 13F filing with the SEC. The fund owned 1,430,599 shares of the software maker’s stock after buying an additional 999,862 shares during the period. Arrowstreet Capital Limited Partnership owned 0.52% of Cadence Design Systems worth $397,521,000 at the end of the most recent reporting period.

Several other hedge funds and other institutional investors have also recently added to or reduced their stakes in CDNS. Whipplewood Advisors LLC increased 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 during the last quarter. Brown Lisle Cummings Inc. increased its position 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 buying an additional 86 shares during the period. University of Texas Texas AM Investment Management Co. bought a new position in Cadence Design Systems during the fourth quarter worth $28,000. Swiss RE Ltd. bought a new position in shares of Cadence Design Systems during the 4th quarter worth about $29,000. Finally, Lodestone Wealth Management LLC bought a new position in Cadence Design Systems during the fourth quarter valued at about $30,000. Institutional investors own 84.85% of the company’s stock.

Cadence Design Systems Stock Down 1.9% Shares of NASDAQ:CDNS opened at $330.46 on Friday. The company’s fifty day moving average is $374.34 and its 200-day moving average is $329.29. The company has a debt-to-equity ratio of 0.38, a quick ratio of 1.32 and a current ratio of 1.47. Cadence Design Systems, Inc. has a 52 week low of $262.75 and a 52 week high of $416.69. The company has a market capitalization of $91.15 billion, a PE ratio of 77.03, a P/E/G ratio of 3.99 and a beta of 1.15.

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

Analyst Ratings Changes CDNS has been the subject of several research reports. Wells Fargo & Company raised their target price on Cadence Design Systems from $400.00 to $425.00 and gave the stock an “overweight” rating in a research report on Tuesday, May 26th. Robert W. Baird boosted their price target on shares of Cadence Design Systems from $381.00 to $385.00 and gave the company an “outperform” rating in a report on Tuesday, April 28th. Needham & Company LLC restated a “buy” rating and issued a $400.00 price objective on shares of Cadence Design Systems in a research note on Tuesday, April 28th. Piper Sandler raised their price objective on shares of Cadence Design Systems from $319.00 to $325.00 and gave the stock a “neutral” rating in a report on Tuesday, April 28th. Finally, KeyCorp lifted their target price on shares of Cadence Design Systems from $405.00 to $425.00 and gave the company an “overweight” rating in a research report on Tuesday, April 28th. One analyst has rated the stock with a Strong Buy rating, thirteen have issued a Buy rating and three have issued a Hold rating to the stock. According to data from MarketBeat.com, the stock has an average rating of “Moderate Buy” and a consensus price target of $393.65.

View Our Latest Report on CDNS

Insider Activity In other news, VP Paul Cunningham sold 2,000 shares of the stock in a transaction on Monday, June 15th. The stock was sold at an average price of $391.00, for a total transaction of $782,000.00. Following the sale, the vice president owned 126,586 shares in the company, valued at approximately $49,495,126. This represents a 1.56% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Ita M. Brennan sold 180 shares of the stock in a transaction on Wednesday, June 10th. The stock was 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 in the company, valued at $3,101,149.80. The trade was 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. Over the last three months, insiders sold 157,057 shares of company stock worth $60,272,277. 0.49% of the stock is currently owned by insiders.

Cadence Design Systems 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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The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though?

Let's take a look at what these Wall Street heavyweights have to say about Cadence Design Systems (CDNS - Free Report) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.

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.

Zacks Rank Should Not Be Confused With ABRIn spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures.

The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.

Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide.

On the other hand, earnings estimate revisions are at the core of the Zacks Rank. And empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

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.

There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.

Is CDNS a Good Investment?Looking at the earnings estimate revisions for Cadence, the Zacks Consensus Estimate for the current year has remained unchanged over the past month at $7.94.

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.

Posted by Defense World Staff on Jul 22nd, 2026

Alesco Advisors LLC An ESL Co purchased a new stake in Cadence Design Systems, Inc. (NASDAQ:CDNS – Free Report) during the 1st quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission (SEC). The institutional investor purchased 2,752 shares of the software maker’s stock, valued at approximately $765,000.

Other institutional investors and hedge funds also recently modified their holdings of the company. Fortis Capital Management LLC grew its holdings in shares of Cadence Design Systems by 4.7% in the 1st quarter. Fortis Capital Management LLC now owns 25,011 shares of the software maker’s stock worth $6,950,000 after acquiring an additional 1,128 shares during the last quarter. Temasek Holdings Private Ltd boosted its holdings in shares of Cadence Design Systems by 319.5% in the first quarter. Temasek Holdings Private Ltd now owns 749,113 shares of the software maker’s stock worth $208,156,000 after buying an additional 570,537 shares during the period. PNC Financial Services Group Inc. increased its position in shares of Cadence Design Systems by 1.3% in the first quarter. PNC Financial Services Group Inc. now owns 374,649 shares of the software maker’s stock worth $104,104,000 after acquiring an additional 4,932 shares in the last quarter. Oslo Pensjonsforsikring AS purchased a new position in shares of Cadence Design Systems in the first quarter worth approximately $34,000. Finally, DJE Kapital AG raised its holdings in shares of Cadence Design Systems by 240,996.0% during the first quarter. DJE Kapital AG now owns 120,548 shares of the software maker’s stock valued at $32,935,000 after acquiring an additional 120,498 shares during the period. Institutional investors and hedge funds own 84.85% of the company’s stock.

Analyst Upgrades and Downgrades CDNS has been the topic of several recent analyst reports. Weiss Ratings reissued a “hold (c)” rating on shares of Cadence Design Systems in a research note on Thursday, July 2nd. KeyCorp lifted their target price on Cadence Design Systems from $405.00 to $425.00 and gave the company an “overweight” rating in a research note on Tuesday, April 28th. Berenberg Bank set a $440.00 price target on shares of Cadence Design Systems in a report on Wednesday, May 27th. Citigroup boosted their price objective on shares of Cadence Design Systems from $385.00 to $400.00 and gave the company a “buy” rating in a research report on Wednesday, April 29th. Finally, Rosenblatt Securities upped their price objective on shares of Cadence Design Systems from $375.00 to $410.00 and gave the company a “buy” rating in a research note on Tuesday, July 14th. One research analyst has rated the stock with a Strong Buy rating, thirteen have given a Buy rating and three have issued a Hold rating to the company. According to data from MarketBeat, Cadence Design Systems presently has an average rating of “Moderate Buy” and a consensus target price of $393.65.

View Our Latest Analysis on CDNS

Cadence Design Systems News Roundup Here are the key news stories impacting Cadence Design Systems this week:

Positive Sentiment: Needham turned bullish on Cadence and Synopsys, saying agentic AI should support EDA license growth as chip design demand increases. Cadence, Synopsys see bullish views at Needham on agentic AI boosting EDA license growth Positive Sentiment: Several recent analysis pieces say fears that Kimi K3 threatens Cadence’s competitive moat are overblown, suggesting the selloff may have been excessive and the stock could recover if fundamentals remain intact. Market Thinks Cadence’s (CDNS) Moat Is at Risk Due To Kimi K3. We Think it’s Not, Here’s Why Neutral Sentiment: Cadence was also the subject of valuation and “buy-the-dip” commentary, indicating investors are debating whether the recent pullback is an opportunity or a warning sign rather than reacting to new operating news. Does This Dip In Cadence Design Systems Stock Signal An Opening? Neutral Sentiment: Analysts and media are focused on Cadence’s upcoming earnings and forward guidance, which keeps attention on whether the company can sustain growth after a strong quarter. Cadence Design Systems (CDNS) Expected to Post Quarterly Earnings on Monday Negative Sentiment: One note pointed to weaker FY2027 earnings expectations from Erste Group Bank, which could weigh on sentiment by implying slower longer-term growth. Erste Group Bank Has Weak Forecast for CDNS FY2027 Earnings Cadence Design Systems Trading Up 4.5% Shares of NASDAQ CDNS opened at $344.64 on Wednesday. The company has a debt-to-equity ratio of 0.38, a quick ratio of 1.32 and a current ratio of 1.47. The stock has a market cap of $95.06 billion, a price-to-earnings ratio of 80.34, a PEG ratio of 3.91 and a beta of 1.15. The business has a 50 day simple moving average of $375.14 and a 200 day simple moving average of $328.98. Cadence Design Systems, Inc. has a 52 week low of $262.75 and a 52 week high of $416.69.

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

Insiders Place Their Bets In related news, CFO John M. Wall sold 5,000 shares of the business’s stock in a transaction that occurred on Tuesday, May 5th. The stock was sold at an average price of $348.71, for a total value of $1,743,550.00. Following the completion of the sale, the chief financial officer directly owned 81,875 shares in the company, valued at approximately $28,550,631.25. The trade was a 5.76% decrease in their position. 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, VP Paul Scannell sold 10,500 shares of the stock in a transaction that occurred on Friday, May 1st. The shares were sold at an average price of $339.00, for a total value of $3,559,500.00. Following the transaction, the vice president owned 33,946 shares in the company, valued at approximately $11,507,694. This trade represents a 23.62% 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. Insiders sold 157,057 shares of company stock worth $60,272,277 in the last three months. 0.49% of the stock is owned by insiders.

Cadence Design Systems 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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Investors with an interest in Computer - Software stocks have likely encountered both Progress Software (PRGS) and Cadence Design Systems (CDNS). But which of these two stocks presents investors with the better value opportunity right now?

Posted by Defense World Staff on Jul 19th, 2026

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

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

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

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

Get Our Latest Research Report on CDNS

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

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

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

About Cadence Design Systems (Free Report)

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

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

Featured Articles Five stocks we like better than Cadence Design Systems Netflix May Be Cheap Enough to Tempt Buyers After Earnings Drop Delta vs. United: Which Airline Is Better Built for Higher Fuel Costs? The Market Sold Alcoa After Earnings—But It May Be Missing the Real Story Why Intuitive Surgical’s Strong Quarter Still Spooked Investors 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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SAN JOSE, Calif.--(BUSINESS WIRE)---- $CDNS #AIforDesign--Cadence (Nasdaq: CDNS) today introduced the AuraStack™ AI Super Agent on Cadence® Allegro® AI Studio, the world's first agentic AI platform for printed circuit board (PCB) and advanced packaging design, taking designers from system planning to final product in a single AI-native environment. The Cadence AuraStack AI Super Agent, accelerated by NVIDIA Blackwell and NVIDIA CUDA-X, coordinates domain-specific AI agents across planning, implementation and tightly.

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Investors looking at the future of computing often find themselves choosing between Cadence Design Systems (CDNS 0.30%) and Synopsys (SNPS 1.74%). Both companies provide the essential software tools needed to design the worlds most advanced computer chips.

While they operate in a similar niche, their financial profiles and recent acquisitions have created two distinct paths for investors. This comparison looks at which stock offers the more compelling balance of growth and risk today.

Cadence Design Systems sells specialized software and hardware that engineers use to design complex computer chips and electromechanical systems. Its tools are vital for customers in the mobile, automotive, and aerospace sectors who need to simulate how their designs will perform in the real world. Recent commercial agreements include a multi-year partnership with Intel and a strategic testing project with Samsung Foundry to advance 2nm chip designs in the semiconductor stocks category.

In FY 2025, revenue reached nearly $5.3 billion, representing a growth rate of approximately 14.1% compared to the previous year. The company reported net income of close to $1.1 billion for the same period. This resulted in a net margin, which measures how much profit a company keeps from every dollar of sales, of roughly 20.9%.

As of its December 2025 balance sheet, the debt-to-equity ratio stood at approximately 0.5x. This metric compares a company's total debt to its shareholder equity to assess financial leverage. The current ratio, which measures the ability to cover short-term debts with short-term assets, was roughly 2.9x. Free cash flow, or the cash remaining after paying for operations and equipment, reached nearly $1.6 billion. Note that stock-based compensation represented roughly 26.3% of operating cash flow, which inflates reported cash generation since this is a non-cash expense added back in the cash flow statement.

The case for SynopsysSynopsys provides silicon-to-systems engineering solutions that include silicon design, intellectual property, and simulation tools. The company serves global customers across markets like data centers and autonomous machines. A key recent partnership with Murata Manufacturing has expanded its simulation models for thermal and electromagnetic analysis.

In FY 2025, revenue reached nearly $7.1 billion, which was a growth of approximately 15.1% over the prior year. Net income for the period was close to $1.3 billion. The company achieved a net margin of roughly 19% during this fiscal year.

As of its October 2025 balance sheet, the debt-to-equity ratio was approximately 0.5x. The current ratio, representing the company's short term liquidity, was roughly 1.6x. Free cash flow for the year reached close to $1.3 billion. Note that stock-based compensation represented roughly 58.8% of operating cash flow, meaning reported cash generation is heavily inflated by this non-cash add-back.

Risk profile comparisonCadence Design Systems faces risks regarding strict monitoring from the July 2025 export control settlement. It also navigates complex intellectual property risks related to its heavy investment in generative and agentic artificial intelligence. Furthermore, the integration of acquisitions like Hexagon requires managing significant operational and cybersecurity challenges.

Synopsys is currently managing multiple class action lawsuits that allege misstatements regarding its intellectual property segment performance. The large-scale merger with Ansys carries risks of operational friction and potentially lower-than-expected synergies. Additionally, the company faces potential strategic shifts following a settlement with Elliott Investment Management.

Valuation comparisonSynopsys appears to be the more affordable option based on future earnings estimates and current sales multiples.

MetricCadence Design SystemsSynopsysSector BenchmarkForward P/E48.6x30.0x357.9xP/S ratio20.1x12.0xSector benchmark uses the SPDR XLK sector ETF.
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.

Which stock would I buy in 2026?This is a close call, but I'd give the edge to Cadence. Both companies sit at the center of one of the most important trends in technology right now: The insatiable demand for more powerful, more efficient chips. And both are benefiting from it in a big way.

Synopsys made a bold move by acquiring Ansys last year, dramatically expanding its reach from chip design into broader engineering simulation. The backlog is enormous, and the long-term strategic logic makes sense. But integrating an acquisition of that size takes time, introduces complexity, and carries a significant debt load that will take years to work down.

Cadence is a cleaner story right now. Its backlog just hit a record, it raised its full-year outlook after a strong quarter, and it is growing profitably across every part of its business. Its AI-powered design tools are winning new customers, and the balance sheet is in excellent shape.

Both companies will likely do well over the long term. But Cadence lets you own the chip design boom without the integration overhang.

On July 07, 2026, we present a DCF analysis for Cadence Design Systems Inc CDNS, a company that has shown a price performance of +20.2% year-to-date and +15.0% over the past year. As we delve into the valuation, we note the following:

DCF Earnings-based intrinsic value of $267.30 vs current price of $375.77 (margin of safety: -59.7%) DCF FCF-based intrinsic value of $143.95 vs current price (significantly overvalued with -161.0% margin of safety) GF Score™ of 99/100 indicates a high reliability of the DCF inputs What Is CDNS Worth? DCF Earnings-Based Model The DCF earnings-based model for Cadence Design Systems Inc CDNS uses a two-stage approach to estimate the intrinsic value of the stock. The first stage considers a high growth rate for the initial ten years, while the second stage applies a terminal growth rate for the subsequent ten years. Below are the key assumptions used in this model:

Parameter Value Current EPS (TTM, excl. non-recurring) $7.53 10-Year Growth Rate 21.9% 10-Year Treasury Rate 4.49% Discount Rate (ceil(Treasury) + 6%) 11% Terminal Growth Rate 4% The growth phase (Years 1-10) assumes that EPS will grow at 21.9% per year, discounted at 11%. The terminal phase (Years 11-20) assumes a slowdown to a 4% terminal growth rate, 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% $130.66 Terminal Stage (Years 11-20) 4% terminal growth, discounted at 11% $136.64 Intrinsic Value Growth + Terminal $267.30 Comparing the current price of $375.77 to the intrinsic value of $267.30, we find that the stock is modestly overvalued, with a margin of safety of -59.7%. It is important to note that GuruFocus uses EPS excluding non-recurring items because research indicates that stock prices correlate more closely with earnings than with 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 Cadence Design Systems Inc is calculated at $143.95. When comparing this to the earnings-based intrinsic value of $267.30, the two models show a significant disagreement. The FCF-based model indicates that the stock is significantly overvalued, with a margin of safety of -161.0%.

How Does GF Value™ Compare to the DCF Models? The GF Value™ for Cadence Design Systems Inc stands at $378.83, providing a third perspective on valuation. GF Value™ is GuruFocus' proprietary measure, calculated from historical trading multiples, past business growth, and future performance estimates. When we compare all three models, we see that the DCF earnings model and the FCF model suggest overvaluation, while the GF Value™ indicates a slight undervaluation. For more information, visit the GF Value™ page.

What Does CDNS's GF Score™ Tell Us? The GF Score™ ranks stocks from 0 to 100 based on five key aspects: Financial Strength, Profitability, Growth, Valuation, and Momentum. Stocks with higher GF Score™ values have been found to generate higher long-term returns based on backtesting from 2006 to 2021.

Metric Rating GF Score™ 99/100 Financial Strength 7/10 Profitability 10/10 Growth 10/10 Valuation 9/10 Momentum 9/10 The predictability rank of 3/5 stars indicates that the DCF model is moderately reliable for this stock. For more insights, visit the CDNS stock page.

Key Assumptions and Limitations It is essential to recognize that DCF models are highly sensitive to the assumptions made regarding growth rates and discount rates. Stocks with low predictability ratings tend to produce less reliable DCF estimates. The terminal growth rate of 4% is a simplifying assumption that may not reflect future market conditions accurately.

What This Means for Investors In synthesizing the findings from the DCF earnings model, the DCF FCF model, and the GF Value™, we conclude that Cadence Design Systems Inc is overvalued based on the current market price compared to the intrinsic values derived from both DCF models. The GF Value™ provides a slightly different perspective but still aligns with the overall conclusion of overvaluation.

For the full DCF analysis, visit the CDNS DCF Calculator. You can also explore the GF Value™ page, or use the GuruFocus Stock Screener to find undervalued predictable companies.

Frequently Asked Questions What is CDNS's intrinsic value based on DCF?

[Answer: earnings-based $235.31, FCF-based $143.95]

Is CDNS overvalued or undervalued?

[Answer using DCF + GF Value™ consensus]

How reliable is the DCF model for CDNS?

[Answer using predictability rank 3/5]

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.

© gorodenkoff / iStock via Getty Images

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

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

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

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

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

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

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

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

Contact [email protected] for any questions or corrections.

Key Takeaways Micron's AI-driven memory demand fueled a historic rally and helped lift three chipmakers by $2T in value. MU posted revenues up more than fourfold, 84.9% gross margins, and record adjusted earnings growth.ETFs like FTXL provide diversified exposure to major semiconductor firms benefiting from memory demand. Micron Technology (MU - Free Report) delivered a historic rally in the second quarter of 2026, with its shares surging over 240% and adding approximately $920 billion to its market capitalization. As the broader semiconductor industry is experiencing an absolute renaissance, ignited by the global artificial intelligence (AI) boom, other chip giants, particularly Advanced Micro Devices (AMD - Free Report) and Intel (INTC - Free Report) , also contributed significantly to the industry’s rally. 

Micron’s extraordinary performance was complemented by Intel's 216% jump, which added $480 billion to its market cap, while AMD’s shares climbed 186% to add $615 billion in market value. Together, this rally contributed to a combined $2 trillion increase in market value for these three chipmakers alone (as cited in CNBC). 

While such gains might tempt investors to add individual names like Micron or AMD to their portfolios, those concerned about chasing stocks at all-time highs may find a more balanced approach through semiconductor exchange-traded funds (ETFs) that hold these chip giants in their top positions, allowing them to benefit from the broader industry rally. 

But before adding one or all of these ETFs to their portfolio, prudent investors may want to investigate the factors that drove this unprecedented growth, particularly Micron’s, and understand why semiconductor ETFs offer a compelling strategy to capture the industry's potential.

Catalysts Behind Micron’s Historic Q2 SurgeMicron's exceptional performance was driven by skyrocketing memory prices fueled by insatiable chip demand coming from accelerating AI infrastructure build-out worldwide. This helped this chipmaker top a $1 trillion market value for the first time in late May 2026, as its shares popped 19% in a single trading session.

MU’s memory rally is further highlighted by its latest reported quarterly results, where its revenues more than quadrupled year over year. This upside in its top line was primarily driven by robust AI-led memory demand, with its data center revenues exceeding $25 billion, reflecting an annualized run rate of more than $100 billion.

Its gross margins jumped dramatically from 39% to an eye-popping 84.9%, thanks to higher pricing. Consequently, the memory chipmaker delivered record adjusted earnings growth of over 1,200% on a year-over-year basis.

No doubt, such strong quarterly results caused MU's stock price to jump 15% in after-hours trading following the earnings announcement. 

Investor confidence in MU’s long-term viability was further cemented by its latest partnership with AI leader Anthropic to supply next-generation infrastructure. With memory chip supply expected to remain tight past 2027, this deal locks in years of predictable, high-margin revenues for Micron and adds impetus to its share price appreciation.

A Booming Semiconductor Market & the Case for ETFsThe AI boom has transformed the semiconductor landscape, with investors widening their focus beyond chip giants like NVIDIA (NVDA - Free Report) to include the entire ecosystem of "AI enablers". As a result, companies that design the processors, interconnects, and interfaces needed to support and leverage high-speed memory technologies such as High Bandwidth Memory (“HBM”) are also experiencing strong share price appreciation, boosting the entire semiconductor industry. 

For instance, Marvell Technology (MRVL - Free Report) , which specializes in custom silicon and complex network data infrastructure, climbed approximately 201% in the second quarter.

The semiconductor industry is projected to maintain a massive multi-year growth trajectory, supported by constrained supply lines and unrelenting hyperscaler data center spending. 

Timing entries into individual chip stocks can be challenging for investors, while also exposing them to the risks associated with concentrated single-stock investments. Specialized semiconductor ETFs can offer diversified exposure to the entire semiconductor value chain, enabling investors to capture upside from multiple segments, including memory makers like Micron, CPU manufacturers such as Intel and AMD, and networking specialists like Marvell.

ETFs to BuyConsidering the aforementioned discussion, one may consider adding the following semiconductor ETFs to their portfolios:

Strive U.S. Semiconductor ETF (SHOC - Free Report)

This fund, with net assets worth $269 million, offers exposure to U.S.-listed semiconductor stocks. NVDA holds the first position in this fund, with 17.26% weightage, while MU holds the second spot with 13.81% weightage. AMD holds the sixth position in this fund, with 5% weightage, while INTC holds the ninth spot with 4.53% weightage. MRVL holds the 10th position with 4.13% weightage. 

SHOC has rallied 77.7% year to date. The fund charges 40 basis points (bps) as fees.

Global X AI Semiconductor & Quantum ETF (CHPX - Free Report)

This fund, with net assets worth $256.2 million, offers exposure to 38 companies that are positioned to benefit from the growth and advancement of the artificial intelligence (AI) semiconductor and quantum computing ecosystems. MU holds the first position in this fund, with 13.65% weightage, while AMD holds the sixth spot with 4.97% weightage. MRVL holds the seventh position in this fund, with 4.88% weightage, while INTC holds the ninth spot with 4.66% weightage. 

CHPX has surged 95% year to date. The fund charges 50 bps as fees.

First Trust NASDAQ Semiconductor ETF (FTXL - Free Report)

This fund, with net assets worth $2.75 billion, offers exposure to 34 U.S. semiconductor companies. INTC holds the first position in this fund, with 13.02% weightage, while MU holds the second spot with 12.52% weightage. MRVL holds the third position in this fund, with 7.67% weightage, while AMD holds the fourth spot with 6.08% weightage. 

FTXL has jumped 120% year to date. The fund charges 60 bps as fees.

Cadence Design Systems (CDNS - Free Report) closed the most recent trading day at $368.23, moving -1.12% from the previous trading session. The stock's performance was behind the S&P 500's daily loss of 0.01%. Meanwhile, the Dow gained 0.14%, and the Nasdaq, a tech-heavy index, lost 0.46%.

Heading into today, shares of the maker of hardware and software products for validating chip designs had lost 0.44% over the past month, outpacing the Computer and Technology sector's loss of 2.57% and the S&P 500's loss of 1.4%.

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 $2.05, up 24.24% from the prior-year quarter. Alongside, our most recent consensus estimate is anticipating revenue of $1.58 billion, indicating a 23.58% upward movement from the same quarter last year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $7.94 per share and revenue of $6.2 billion. These totals would mark changes of +11.2% and +17.11%, respectively, from last year.

Investors should also take note of any recent adjustments to analyst estimates for Cadence Design Systems. These latest adjustments often mirror the shifting dynamics of short-term business patterns. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. Cadence Design Systems is currently a Zacks Rank #3 (Hold).

In the context of valuation, Cadence Design Systems is at present trading with a Forward P/E ratio of 46.91. This indicates a premium in contrast to its industry's Forward P/E of 14.1.

We can also see that CDNS currently has a PEG ratio of 3.46. 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. As the market closed yesterday, the Computer - Software industry was having an average PEG ratio of 1.27.

The Computer - Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 162, placing it within the bottom 34% of over 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.

I rate Cadence Design Systems a Buy with a $460 price target, reflecting 37% upside potential from the current level of $379. My growth drivers are agentic AI inside core EDA, semiconductor IP tied to memory and interconnect, SDA after Hexagon, and steady EPS support from buybacks and acquisition accretion. I assume these growth drivers can support the EPS to move from the current $7.90 to a 2028 adjusted EPS estimate of $10.07.

Cadence Design Systems (CDNS - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.

Over the past month, shares of this maker of hardware and software products for validating chip designs have returned +14.7%, compared to the Zacks S&P 500 composite's +1.6% change. During this period, the Zacks Computer - Software industry, which Cadence falls in, has lost 6.3%. The key question now is: What could be the stock's future direction?

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 $2.05 per share, indicating a change of +24.2% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

The consensus earnings estimate of $7.94 for the current fiscal year indicates a year-over-year change of +11.2%. This estimate has remained unchanged over the last 30 days.

For the next fiscal year, the consensus earnings estimate of $9.3 indicates a change of +17.2% from what Cadence is expected to report a year ago. Over the past month, the estimate has remained unchanged.

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.

In the case of Cadence, the consensus sales estimate of $1.58 billion for the current quarter points to a year-over-year change of +23.6%. The $6.2 billion and $6.97 billion estimates for the current and next fiscal years indicate changes of +17.1% and +12.4%, respectively.

Last Reported Results and Surprise HistoryCadence reported revenues of $1.47 billion in the last reported quarter, representing a year-over-year change of +18.7%. EPS of $1.96 for the same period compares with $1.57 a year ago.

Compared to the Zacks Consensus Estimate of $1.45 billion, the reported revenues represent a surprise of +1.69%. The EPS surprise was +4.26%.

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.

© izzuanroslan / Shutterstock.com

The semiconductor rally has continued to act as a trader’s playground. In a recent comment on X, Eric Balchunas, a senior ETF analyst, remarked on a snapshot of his that half of the most-traded ETFs on that day (that was at the start of June) were related to the semiconductor industry.

Balchunas has his fair share of experience, yet he said he’s never seen anything like that. That’s a big deal. And what’s even more remarkable are the volumes in such ETFs. While the snapshot is more than remarkable, things have since settled a bit.

While such semi-related ETFs don’t comprise half of the top ETFs in the volume list, many of them are sticking around. Indeed, there’s been no shortage of momentum and volatility. And until things settle, I’d look for bets for and against the names to keep drawing in considerable interest from across the board.

The 3X semi ETFs have exploded in popularity As it stands today, the Direxion Daily Semiconductor Bear 3X Shares (NYSEARCA:SOXS) is at the top of the list. After last Friday’s plunge in the semiconductor stocks, sparked by rising bond yields and fears that hot jobs could cause rate increases, it should be no mystery as to why this aggressive ETF is back in the spotlight.

Indeed, for those seeking to maximize their gains in a reversal of the semiconductor trade, the Direxion Daily Semiconductor Bear 3X Shares is the instrument of choice. Of course, it’s a risky play, but now that there are prominent dents in the armor of the semiconductor trade, perhaps there are a slew of investors who want to swing for the fences.

After all, the great Dr. Michael Burry from The Big Short is still betting against the semiconductors with bearish put options against the iShares Semiconductor ETF (NASDAQ:SOXX). While it’s not quite the same trade, the idea is pretty much the same. Some prefer to go down the route of options, while others would be happy with a levered short ETF against an industry.

As it turned out, going against the semiconductors was not a smooth ride. At least that’s what last week’s action showed us. The industry bounced back quite sharply after the turbulent Friday session. And with the Dierexion Daily Semiconductor Bull 3X Shares (NYSEARCA:SOXL) also enjoying significant trading volumes this week, it’s clear that there’s interest on both sides of the trade.

Betting against the semis is what’s in Indeed, it feels good to be on the same side of a trade as the likes of Michael Burry. But, at the same time, it’s hard to get the timing right. With various other semi-related ETFs also experiencing massive flows, including bearish 2X short ETFs on individual semi names, including SanDisk (NASDAQ:SNDK | SNDK Price Prediction) and Nvidia (NASDAQ:NVDA), it feels like betting against some form of semi is the hottest trade of the summer.

Given the volatility in both directions, investors had better fasten their seatbelts, as a strong stomach will be needed. To be honest with you, I didn’t even know that individual semi names, like SanDisk and Nvidia, had ETFs tied to them. Either way, though, demand has been scorching this month, and for those looking to capitalize on a ridiculously frothy corner of the market that Michael Burry highlighted, there are ETFs to get the job done.

Personally, I’m staying on the sidelines because there’s no telling if the latest choppiness is anything more than just a blip.

The cohort bounced back quite swiftly, as AI demand has remained hot. While I do think the semis are overcrowded, I think it’s going to be tricky to get the timing right. If the group returns to rally mode, semi-related ETFs could cool off again, at least until the next round of choppiness.

Cadence Design Systems (CDNS - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.

Shares of this maker of hardware and software products for validating chip designs have returned +12.2% over the past month versus the Zacks S&P 500 composite's +4.8% change. The Zacks Computer - Software industry, to which Cadence belongs, has lost 2.3% 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.

We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

Cadence is expected to post earnings of $2.05 per share for the current quarter, representing a year-over-year change of +24.2%. Over the last 30 days, the Zacks Consensus Estimate has changed +12.9%.

For the current fiscal year, the consensus earnings estimate of $7.94 points to a change of +11.2% from the prior year. Over the last 30 days, this estimate has changed +1.9%.

For the next fiscal year, the consensus earnings estimate of $9.3 indicates a change of +17.2% from what Cadence is expected to report a year ago. Over the past month, the estimate has changed +1.3%.

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 $1.58 billion indicates a year-over-year change of +23.6%. For the current and next fiscal years, $6.2 billion and $6.97 billion estimates indicate +17.1% and +12.4% changes, respectively.

Last Reported Results and Surprise HistoryCadence reported revenues of $1.47 billion in the last reported quarter, representing a year-over-year change of +18.7%. EPS of $1.96 for the same period compares with $1.57 a year ago.

Compared to the Zacks Consensus Estimate of $1.45 billion, the reported revenues represent a surprise of +1.69%. The EPS surprise was +4.26%.

The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.

ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.

Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.

As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it 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.

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Multi-year agreement expands Memory, NVIDIA NVLink-C2C and advanced Interface IP, and agentic AI-optimized GPU‑accelerated EDA and SDA flows on Samsung Foundry’s second-generation 2nm node for next-generation AI infrastructure and physical AI designs

SAN JOSE, Calif. & SEOUL, South Korea--(BUSINESS WIRE)--Cadence (Nasdaq: CDNS) and Samsung Foundry today announced development of a full portfolio of Memory and Interface IP, and expanded certification of Cadence’s agentic AI digital, custom, 3D‑IC and system design and analysis (SDA) flows for Samsung Foundry’s second-generation 2nm process technology. This collaboration delivers a signoff‑ready platform for next‑generation AI infrastructure and physical AI designs across data center, edge and intelligent devices.

Building on the companies’ 2025 announcement of certified Cadence tools and IP on multiple Samsung Foundry nodes, including second-generation 2nm, this new multi-year agreement further broadens the Cadence® portfolio of Memory and Interface IP.

Share Building on the companies’ 2025 announcement of certified Cadence tools and IP on multiple Samsung Foundry nodes, including second-generation 2nm, this new multi-year agreement further broadens the Cadence® portfolio of Memory and Interface IP, including NVIDIA NVLink-C2C-enabled interconnect and CUDA-X GPU-accelerated libraries spanning high-speed SerDes, PCIe®, UCIe® and all leading memory interfaces on second-generation 2nm. It also deepens enablement of certified Cadence flows so ecosystem partners can implement large AI, HPC and advanced system designs with higher performance, lower power and faster time to tapeout.

“AI infrastructure and physical AI are pushing the industry into advanced node and 3D‑IC designs that demand far more capacity, integration and signoff confidence than ever before,” said Boyd Phelps, senior vice president and general manager of the Silicon Solutions Group at Cadence. “With this next phase of our Samsung Foundry collaboration, we’re giving joint customers a production‑proven platform to deliver the next-generation of AI and HPC systems to market faster.”

“Customers are increasingly drawn to Samsung Foundry’s second-generation 2nm for leading‑edge AI designs that must keep pace with the exploding demand across AI infrastructure and emerging physical AI applications,” said Jongshin Shin, executive vice president and head of Foundry Design Platform Development at Samsung Electronics. “Our expanded Cadence partnership delivers a robust semiconductor and 3D-IC platform with advanced Memory, Interface IP and AI-optimized flows for superior performance, efficiency and innovation.”

Agentic AI EDA/SDA Platform and 3D-IC Design on Samsung Foundry’s Second-Generation 2nm

Cadence and Samsung Foundry deliver a comprehensive certified flow on second-generation 2nm, including Cadence’s Innovus™ Implementation System for digital implementation, Virtuoso® Studio for analog and custom design, Integrity™ 3D‑IC Platform for full 3D‑IC system planning and implementation, Voltus™ IC Power Integrity Solution for power integrity and system‑level power analysis, and Quantus™ Extraction Solution and Tempus™ Timing Solution for signoff.

Cadence enables key second-generation 2nm design features, including the Innovus system and Genus™ Synthesis Solution’s glitch power optimization in the place and route flow, and a smart hierarchical flow to achieve optimal performance, power, and area (PPA) and turnaround time (TAT).

Samsung 3D Cube-H design is enabled with a full system planning, implementation and signoff flow for hybrid copper bonding (HCB) technology, including Cadence Cerebrus® Intelligent Chip Explorer, Integrity 3D‑IC, Innovus Implementation, Voltus IC Power Integrity (ERA) and Pegasus™ Verification System. It includes silicon interposer auto-routing and optimization, and ensures tighter connectivity between analysis, signoff, and verification, with the Tempus and Pegasus solutions providing trusted, confident signoff.

Advancing NVLink-C2C Interconnect for Next-Generation AI Infrastructure

NVIDIA is leveraging Cadence and Samsung Foundry’s expanded advanced-node and 3D-IC platform to deliver high-bandwidth interconnect through NVIDIA NVLink-C2C and CUDA-X GPU accelerated capabilities—foundational technologies that power next-generation accelerated computing systems and strengthen the broader ecosystem’s ability to produce high-performance AI semiconductors.

“As AI workloads scale and system architectures grow more demanding, the semiconductor ecosystem depends on tools and platforms that can keep pace with simulation and design complexity at advanced nodes,” said Timothy Costa, vice president and general manager of computational engineering, NVIDIA. "By leveraging Cadence’s GPU-accelerated design flows on Samsung Foundry’s second-generation 2nm platform, we’re optimizing the performance and delivery of next-generation AI architectures and high-bandwidth interconnects.”

Enabling Ambarella’s Next-Generation Edge AI Platform

Ambarella is developing its next-generation 2nm edge AI platform to extend its leadership in high-performance, ultra-low-power AI perception and physical AI SoCs for intelligent edge systems spanning robotics, drones, autonomous machines, and advanced sensing applications.

“Ambarella’s edge AI strategy is focused on delivering industry‑leading performance per watt, scalable AI acceleration, and robust multi‑sensor processing at the most advanced process nodes,” said Chan Lee, chief operating officer at Ambarella. “Our collaboration with Cadence and Samsung Foundry to deliver IP for PCIe 5.0 for our next‑generation 2nm edge AI platform has been critical as we address the design, verification and manufacturing complexity of this node. Having a signoff‑ready, co‑optimized IP and tools solution, together with a robust, production‑proven design kit and PDK, enables our teams to move forward with confidence, reduce risk and stay focused on accelerating innovation in low‑power AI perception, physical AI and intelligent edge computing.”

Cadence and Samsung Foundry will highlight their enhanced partnership and design enablement during the Samsung Advanced Foundry Ecosystem (SAFE) 2026 event, featuring technical sessions and demonstrations showcasing second-generation 2nm and 3D-IC design flows for GPU-accelerated AI workloads.

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 2024, Cadence was recognized by the Wall Street Journal as one of the world’s top 100 best-managed companies. Cadence solutions offer limitless opportunities—learn more at www.cadence.com.

© 2026 Cadence Design Systems, Inc. All rights reserved worldwide. Cadence, the Cadence logo and the other Cadence marks found at www.cadence.com/go/trademarks are trademarks or registered trademarks of Cadence Design Systems, Inc. PCI Express and PCIe are registered trademarks of PCI-SIG. PCI Express and PCIe are registered trademarks of PCI-SIG. Universal Chiplet Interconnect Express and UCIe are trademarks of the UCIe Consortium. All other trademarks are the property of their respective owners.

Category: Featured

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Level-5 ChipStack AI Super Agent framework and NVIDIA OpenShell runtime advance secure, agentic AI across semiconductor development

SAN JOSE, Calif.--(BUSINESS WIRE)--At Computex 2026, Cadence (Nasdaq: CDNS) announced the industry’s first fully autonomous virtual agentic AI design engineer, extending the ChipStack™ AI Super Agent to Level-5 autonomy. Built on Cadence’s AI-driven electronic design automation (EDA) portfolio with NVIDIA Nemotron models, and secured by NVIDIA OpenShell runtime, the new agentic capabilities enable customers to run dynamic simulations in automated workflows. At NVIDIA, 1000s of engineers are using billions of compute hours per year to run millions of tests to verify their designs. Each engineer will use ChipStack agents to run hundreds of dynamic simulations with Cadence® Xcelium™ Logic Simulation and Jasper® Formal Verification, delivering over 40X faster RTL validation cycles and reducing a typical five-week verification loop to less than a day, dramatically accelerating the validation of complex semiconductor designs.

Built on Cadence’s AI-driven electronic design automation (EDA) portfolio with NVIDIA Nemotron models, and secured by NVIDIA OpenShell runtime, the new agentic capabilities enable customers to run dynamic simulations in automated workflows.

Share “We see our customers using AI to let their expert engineers take on more ambitious silicon designs with greater speed and confidence,” said Paul Cunningham, senior vice president and general manager of the System Verification Group at Cadence. “With the ChipStack AI Super Agent, we’re taking the next step—moving from AI that assists engineers to autonomous virtual engineers that can implement real design and verification work, grounded in our signoff-accurate engines and running in secure, governed environments so teams can innovate faster with confidence.”

From AI Assistance to Autonomous Engineering

The ChipStack AI Super Agent now operates at Level-5 autonomy, independently executing complex chip design and verification workflows while allowing engineers to inspect, guide and collaborate as needed. Native integration with collaboration environments and compatibility with tools like Codex or Claude Code, provides transparency into autonomous activity, helping teams stay connected to the system’s progress and decisions.

Rather than relying on step-by-step prompts, the ChipStack AI Super Agent evaluates intermediate results, determines next actions and iterates toward closure across tasks such as specification understanding, RTL generation, verification planning, formal analysis, simulation, debug and design convergence. This shifts engineers from executing individual tasks to supervising outcomes and guiding intent, as autonomous verification workflows shrink validation cycles that traditionally took weeks down to less than a day in leading-edge deployments.

Grounded in Engineering Truth, Secured for Production

A key Cadence differentiator is that autonomous agent behavior is tightly coupled with the company’s core physics-based design and verification engines. This keeps AI-directed actions grounded in proven computational models and signoff-accurate results, creating the trust needed for high-stakes engineering programs.

To support production deployment, the ChipStack AI Super Agent is run within the NVIDIA OpenShell runtime, a sandboxed environment for autonomous agents that enforces governance and helps protect sensitive IP through policy controls, isolation and managed access to tools, infrastructure and design data. Together, Cadence’s physics-based engines and OpenShell’s security architecture provide a practical path from supervised pilots to production-grade autonomous flows.

“As semiconductor designs grow more complex, engineering teams need AI agents that can accelerate verification without compromising security, control or trust,” said Timothy Costa, vice president and general manager of computational engineering at NVIDIA. “By securing Cadence's ChipStack AI Super Agent with NVIDIA OpenShell and powering it with Nemotron models, Cadence is bringing governed autonomy to chip design workflows — giving customers a faster, more secure path to develop and validate advanced semiconductors.”

Leading the Next Era of Agentic AI

This announcement reflects the speed of Cadence innovation in agentic AI, powered by NVIDIA. Following the acquisition of ChipStack in November 2025, Cadence launched its first product in February 2026 and expanded into a portfolio of AI super agents at CadenceLIVE in April, introducing ViraStack AI Super Agent for custom and analog design, InnoStack AI Super Agent for digital implementation and signoff, and Cadence AgentStack as the orchestration framework for coordinating agentic workflows across the design stack. Cadence is now extending those capabilities to full autonomy.

Availability

The Level-5 autonomous capabilities of the ChipStack AI Super Agent and the AgentStack orchestration framework are expected to be available to early-access customers in the second half of 2026.

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.

© 2026 Cadence Design Systems, Inc. All rights reserved worldwide. Cadence, the Cadence logo, and the other Cadence marks found at www.cadence.com/go/trademarks are trademarks or registered trademarks of Cadence Design Systems, Inc. All other trademarks are the property of their respective owners.

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On June 02, 2026, we delve into the DCF analysis for Cadence Design Systems Inc (CDNS), a company that has shown impressive price performance recently. Over the

Investors with an interest in Computer - Software stocks have likely encountered both Adobe Systems (ADBE) and Cadence Design Systems (CDNS). But which of these two stocks offers value investors a better bang for their buck right now?

Cadence Design Systems, Inc. (CDNS) Presents at Bank of America 2026 Global Technology Conference Transcript

Cadence Design Systems (CDNS - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.

Shares of this maker of hardware and software products for validating chip designs have returned +15.4% over the past month versus the Zacks S&P 500 composite's +5.5% change. The Zacks Computer - Software industry, to which Cadence belongs, has gained 6.5% over this period. Now the key question is: Where could the stock be headed in the near term?

While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.

Revisions to Earnings EstimatesRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.

We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For the current quarter, Cadence is expected to post earnings of $2.05 per share, indicating a change of +24.2% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

For the current fiscal year, the consensus earnings estimate of $7.94 points to a change of +11.2% from the prior year. Over the last 30 days, this estimate has remained unchanged.

For the next fiscal year, the consensus earnings estimate of $9.3 indicates a change of +17.2% from what Cadence is expected to report a year ago. Over the past month, the estimate has remained unchanged.

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 $1.58 billion indicates a year-over-year change of +23.6%. For the current and next fiscal years, $6.2 billion and $6.97 billion estimates indicate +17.1% and +12.4% changes, respectively.

Last Reported Results and Surprise HistoryCadence reported revenues of $1.47 billion in the last reported quarter, representing a year-over-year change of +18.7%. EPS of $1.96 for the same period compares with $1.57 a year ago.

Compared to the Zacks Consensus Estimate of $1.45 billion, the reported revenues represent a surprise of +1.69%. The EPS surprise was +4.26%.

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.

As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it 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.

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Expanded cooperation spans DTCO, IP readiness and design enablement to advance next-generation customer innovation

SAN JOSE, Calif.--(BUSINESS WIRE)--Cadence (Nasdaq: CDNS) today announced an expanded collaboration with Intel Foundry to advance Design Technology Co-Optimization (DTCO) targeting Intel’s next-generation process technologies, beginning with Intel 14A. The new multi-year agreement combines Cadence’s agentic AI-driven EDA and Design IP solutions with Intel’s process innovation and advanced design expertise.

Cadence and Intel will work closely to optimize Intel 14A to deliver production-ready PDKs. The collaboration will also leverage Cadence’s agentic AI flows and core products to accelerate time-to-market and reduce design risk.

Share The DTCO collaboration focuses on optimizing tools, flows, and methodologies to deliver industry-leading performance, power, and area (PPA). Cadence and Intel will work closely to optimize Intel 14A to deliver production-ready PDKs. The collaboration will also leverage Cadence’s agentic AI flows and core products to accelerate time-to-market and reduce design risk.

“Advancing our relationship with Intel into a much deeper partnership is a major milestone for both companies,” said Anirudh Devgan, president and chief executive officer, Cadence. “This collaboration will leverage the strengths of both companies to empower customers to unlock new levels of performance, power, and efficiency, advance the state of the art and accelerate the realization of next-generation products.”

“Our expanded collaboration with Cadence reflects Intel Foundry’s continued focus on delivering on its technology roadmap and ecosystem on behalf of our customers,” said Naga Chandrasekaran, executive vice president and general manager of Intel Foundry. “By combining Intel’s process and packaging with Cadence’s AI-driven design tools, we are enabling deeper co-optimization, strengthening our ability to deliver on customers’ needs, and showcasing the ability of both companies to drive innovation at scale.”

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 2024, Cadence was recognized by the Wall Street Journal as one of the world’s top 100 best-managed companies. Cadence solutions offer limitless opportunities—learn more at www.cadence.com.

© 2026 Cadence Design Systems, Inc. All rights reserved worldwide. Cadence, the Cadence logo and the other Cadence marks found at www.cadence.com/go/trademarks are trademarks or registered trademarks of Cadence Design Systems, Inc.

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Calculating the Downside Target The EWP count remains in line with the index’s price action, having peaked on June 3 at $13,998, right at the top of the ideal target zone for the red 3rd wave; W-iii. Now the red 4th Wave (W-iv) is underway, subdividing into three smaller (green) waves. Unless this 4th wave becomes more complex, which can’t be foreseen, the index should now be in the green W-c, after topping today within the ideal green W-b target zone.

Zooming out, we see that the blue 161.8% extension mentioned in our previous update was reached. See Figure 2 below. With the red W-iii complete and exceeding the 161.80% level at $13,336 by 662p, we can now expect the red W-iv, which often targets the (blue) 100.0%, to stall ~662p north of it ($9,523 + $662 = $10,185), which aligns with the $10,390-11,490 target zone shown in Figure 1. After four comes five, so the red W-v, ideally to $15,000 +/- $1,000, is still pending.