Cadence Design Systems Inc.

Cadence Design Systems Inc.

Cadence Design Systems (CDNS) is a leading provider of electronic‑design automation (EDA) software and semiconductor IP used to design, verify and optimise chips and complex electronic systems. Investors should know Cadence benefits from secular trends — rising chip complexity, AI acceleration and growing demand for custom silicon — which support steady software licence and subscription revenue. The company combines product sales, recurring licences, and professional services, and has a strong position with major semiconductor and systems companies. That said, Cadence’s business is sensitive to semiconductor industry cycles, capital spending patterns and long sales cycles for large design projects. Financial performance can fluctuate with macro conditions, and past performance is no guarantee of future returns. This summary is for educational purposes only and not personalised investment advice; consider your own situation and consult a financial professional before acting.

Why It's Moving

Cadence Design Systems Inc.

Cadence Design Systems powers ahead with record backlog and raised 2025 outlook after stellar Q3 results.

Cadence Design Systems delivered impressive Q3 2025 earnings, featuring record $7.0 billion backlog that signals surging demand for its electronic design automation tools amid AI and chip design booms. The company lifted its full-year revenue growth guidance to about 14% year-over-year, reinforcing investor confidence in its growth trajectory despite some long-term concerns.

Sentiment:
🐃Bullish
  • Q3 billings hit $1.36 billion with 21.8% average YoY growth over recent quarters, highlighting robust customer demand and enhanced liquidity for expansion.
  • Earnings crushed estimates at $1.93 per share on $1.34 billion revenue, up 10.1% YoY, with a swift 7.7-month customer acquisition cost payback showcasing product strength.
  • Needham analyst upheld Buy rating with $390 target, while stock climbed 2.3% to $337 amid positive analyst updates and market alignment.

Stock Performance Snapshot

Buy

Analyst Rating

Analysts recommend buying Cadence Design Systems’ stock with a target price of $383.61, indicating growth potential.

Above Average

Financial Health

Cadence Design Systems is performing well with strong profits and cash generation, indicating healthy operations.

Source: Analyst sentiment is provided by Refinitiv Ltd, a global leader in financial market data with over 40k business clients. Refinitiv Ltd is an independent third party to Nemo. This is not advice.

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Why You’ll Want to Watch This Stock

📈

EDA Growth Drivers

Rising chip complexity, AI and custom silicon boost demand for design and verification tools, though industry cycles can affect revenue timing.

Technology & IP

Cadence combines software, semiconductor IP and services to offer integrated flows and recurring revenue, but competitive innovation is ongoing.

🌍

Global Customer Base

Major semiconductor and systems companies are core customers, providing scale and visibility, yet exposure to global macro and supply risks remains.

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