Cadence Design Systems, Inc. Website

Cadence Design Systems, Inc.

NasdaqGS-CDNS

Company Overview

Cadence Design Systems, Inc. provides software, hardware, services, and reusable integrated circuit (IC) design blocks worldwide. The company offers functional verification services, including emulation and prototyping hardware. Its functional verification offering consists of JasperGold, a formal verification platform; Xcelium, a parallel logic simulation platform; Palladium, an enterprise emulation platform; and Protium, a prototyping platform for chip verification. The company also provides digital IC design and sign off products, including Genus logic synthesis and Joules RTL power solutions, as well as Modus software solution to reduce systems-on-chip design-for-test time; physical implementation tools, such as place and route, optimization, and multiple patterning preparation; and signoff products to signoff the design as ready for silicon manufacturing. In addition, it offers custom IC design and simulation products to create schematic and physical representations of circuits down to the transistor level for analog, mixed-signal, custom digital, memory, and radio frequency designs; and system design and analysis products to develop printed circuit boards and IC packages, as well as to analyze electromagnetic, electro-thermal, and other multi-physics effects. Further, the company provides intellectual property (IP) products comprising pre-verified and customizable functional blocks to integrate into customer's ICs; and verification IP and memory models to emulate and model the expected behavior and interaction of standard industry system interface protocols. Additionally, it offers services related to methodology, education, and hosted design solutions, as well as technical support and maintenance services. The company serves 5G communications, aerospace and defense, automotive, industrial and healthcare, mobile, consumer, and hyperscale computing markets. Cadence Design Systems, Inc. was incorporated in 1987 and is headquartered in San Jose, California.

  • Name

    Cadence Design Systems, Inc.

  • CEO

    Anirudh Devgan

  • Website

    www.cadence.com

  • Sector

    Software

  • Year Founded

    1987

Company Statistics

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Bulls Say

  • With limited competition and products that are essential in support of the semiconductor industry, which generates more than $500 billion in annual revenue, Cadence’s moat is wide and durable.

  • Secular tailwinds will drive new chip design starts, raise R&D intensity, and open up new markets for semiconductor focused EDA tools, leading to excess revenue growth for 10 or more years.

  • Cadence’ margins should only improve, supported by improving IP margins, greater AI-driven wallet share, and internal AL/ML optimizations that enhance operational efficiency.

Bears Say

  • The valuation is not cheap, and the market is already giving Cadence full credit for the upcoming growth cycle. Any hiccups along the way will lead to declines in valuation.

  • Geopolitical tensions with China and China’s focus on supporting domestic companies could affect Cadence’s ability to do business in the region and lead to slower revenue growth.

  • Cadence has less share with the overall IP market, and currently the analog space is not growing as fast as the digital semiconductor industry given the AI demand boom, so Cadence could underperform peers.

Source: Morningstar Analysis - Oct 28, 2025

What's happening

Nov 5, 2025 - Dec 5, 2025

Cadence Design Systems: Navigating Mixed Signals Amidst Positive Developments

  • Analysts upgraded Cadence from "underperform" to "perform," reflecting increased confidence in growth prospects.
  • The company reported strong quarterly results, with revenues of $1.34 billion and earnings per share of $1.93, marking a 10.1% year-over-year increase.
  • Insider selling activities raised concerns about executive confidence despite positive institutional support for the stock.

Over the past month, Cadence Design Systems (CDNS) experienced an overall movement of 0.9%. This performance was slightly below the S&P 500's return of 1.3%, indicating an underperformance of -0.4% relative to the broader market. However, CDNS outperformed the Information Technology sector (XLK), which saw a decline of 1.0%, highlighting its resilience amid challenging conditions.

The bullish sentiment surrounding CDNS was fueled by several positive developments during this period. On December 1st, analysts upgraded Cadence from "underperform" to "perform," setting a price target at $275 and reflecting increased confidence in its growth prospects. The company also reported strong quarterly results with revenues reaching $1.34 billion and earnings per share exceeding expectations at $1.93, contributing to a year-over-year revenue increase of 10.1%. Analysts projected further EPS growth for FY2025, reinforcing optimism about future performance.

In addition to these financial results, Cadence secured multiple buy ratings from prominent firms such as Citigroup and KGI Securities earlier in November; their price targets were set significantly higher than current levels—$385 and $390 respectively—which bolstered investor sentiment further as it indicated strong institutional support for the stock’s potential upside.

However, bearish sentiments emerged due to insider selling activities that raised concerns among investors regarding executive confidence in future performance; notable transactions included significant share sales by senior executives shortly before key earnings announcements and other strategic events like presentations at industry conferences.

Despite these mixed signals from insider actions and external collaborations within the semiconductor ecosystem that could negatively impact competitive positioning against peers such as Synopsys or Siemens, overall trends suggested that while challenges remain—particularly related to market dynamics—the company's core strengths persisted amidst evolving technological demands driven by AI advancements across various sectors including automotive and telecommunications.

Cadence Design Systems Inc outperformed the Information Technology (XLK) sector by 1.9%.

NasdaqGS:CDNS