Semiconductor industry capital intensity and design starts—particularly at advanced nodes (5nm and below) where Cadence has 90%+ share in digital implementation
Hyperscaler and AI chip design activity (Google TPU, Amazon Trainium, Microsoft Maia, NVIDIA GPUs)—these customers drive high-value, multi-tool deployments
Automotive semiconductor content growth—ADAS, electrification, and software-defined vehicles require 5-10x more chip design resources
Subscription renewal rates and average contract value expansion—upsells to advanced node tools and IP bundles drive 15-20% annual contract growth
moderate - Revenue is 90%+ recurring through multi-year contracts, providing downside protection during semiconductor downturns. However, new design starts and hardware sales are cyclical, tied to chip industry capex cycles. During 2022-2023 semiconductor correction, Cadence grew revenue 12-14% while chip equipment companies (AMAT, LRCX) declined 10-20%, demonstrating relative resilience. Long-term growth is structural (increasing chip complexity, more design tools per chip) but near-term bookings correlate with semiconductor capex and foundry utilization rates.
Rising rates create modest headwinds through two mechanisms: (1) valuation multiple compression—CDNS trades at 15-20x sales, typical for high-growth software, so higher discount rates reduce NPV of future cash flows; (2) customer financing costs—semiconductor startups and smaller fabless companies face higher capital costs, potentially delaying design projects. However, impact is limited because 80%+ of revenue comes from large, investment-grade customers (TSMC, Samsung, Intel, Qualcomm, Broadcom, NVIDIA) with strong balance sheets. Cadence itself carries minimal debt (0.48x D/E) and generates $1.1B+ FCF, so direct financing cost impact is negligible.
Semiconductor industry consolidation reducing total addressable customers—M&A among fabless companies (e.g., AMD/Xilinx, NVIDIA/Arm attempts) can eliminate duplicate tool seats and compress pricing
Foundry vertical integration into EDA tools—TSMC, Samsung developing proprietary design flows could disintermediate third-party EDA vendors at advanced nodes
Open-source EDA movement gaining traction in academia and RISC-V ecosystem—though commercial-grade capabilities lag by 5-10 years, could pressure pricing in mature nodes
growth - Investors pay 15-20x sales for durable 12-15% revenue growth, 85%+ gross margins, and 30%+ FCF margins. Stock appeals to quality growth investors seeking secular semiconductor content growth with recession-resistant recurring revenue model. Institutional ownership exceeds 90%, with concentration in growth-at-reasonable-price (GARP) and technology-focused funds. Minimal dividend (0.2% yield) reflects reinvestment priority in R&D and tuck-in M&A.
Trend
+16.9% vs SMA 50 · +10.8% vs SMA 200
Momentum
Accumulation pattern present — more buying days than selling over the past 20 sessions. Volume conditions support gradual price improvement.
Based on volume distribution analysis. Direct short interest data (short float %, days to cover) is not available in current data sources.
Analyst consensus estimates · Actuals replace estimates as reported
| Year | Revenue Est. | Rev Gth | EPS Est. | EPS Gth | Range | Analysts |
|---|---|---|---|---|---|---|
FY2025 | $5.3B $5.3B–$5.3B | — | $7.06 | — | ±0% | High18 |
FY2026(current) | $6.2B $6.2B–$6.2B | ▲ +17.5% | $7.94 | ▲ +12.4% | ±1% | High19 |
FY2027 | $7.0B $6.8B–$7.2B | ▲ +12.9% | $9.36 | ▲ +17.9% | ±5% | High18 |
In ATTAIN-MAINTAIN, participants who transitioned from a maximum tolerated dose (MTD) of Wegovy (sem…
cadence is a leading provider of eda and semiconductor ip. our custom/analog tools help engineers design the transistors, standard cells, and ip blocks that make up socs. our digital tools automate the design and verification of giga-scale, giga-hertz socs at the latest semiconductor processing nodes. our ic packaging and pcb tools permit the design of complete boards and subsystems. cadence also offers a growing portfolio of design ip and verification ip for memories, interface protocols, analog/mixed-signal components, and specialized processors. and reaching up to the systems level, cadence offers an integrated suite of hardware/software co-development platforms. in short, cadence® technology helps customers build great products that connect the world.
| Symbol | Price | Day % | Mkt Cap↓ | P/E | Rev Grw | Margin | ELO |
|---|---|---|---|---|---|---|---|
CDNS◀ | $358.04 | +0.41% | $100.5B | 84.6 | +1412.3% | 2093.5% | 1496 |
| $220.78 | +1.97% | $5.3T | 44.4 | +6547.4% | 5560.3% | 1496 | |
| $294.80 | -0.22% | $4.3T | 35.1 | +642.6% | 2691.5% | 1484 | |
| $407.77 | -0.59% | $3.1T | 24.5 | +1493.2% | 3614.6% | 1471 | |
| $419.30 | -0.37% | $2.0T | 81.3 | +2387.4% | 3619.8% | 1498 | |
| $766.58 | +6.50% | $896.9B | 37.1 | +4885.1% | 2284.5% | 1533 | |
| $449.50 | +0.79% | $748.1B | 149.9 | +3433.8% | 1251.5% | 1520 | |
| Sector avg | — | +1.21% | — | 65.3 | +2971.7% | 3016.5% | 1500 |