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 synthesis and Joules RTL power solutions, as well as Modus DFT 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 Innovus implementation system, a physical implementation system. 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 with 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 consumer, hyperscale computing, 5G communications, mobile, automotive, aerospace and defense, industrial, and life science industries. Cadence Design Systems, Inc. was incorporated in 1987 and is headquartered in San Jose, California.

Cadence Design Systems выглядит как качественный, но уже очень дорого оценённый бизнес. Выручка, валовая прибыль, операционная прибыль и чистая прибыль остаются высокими и в целом растут по годам, что подтверждает устойчивость спроса на EDA-решения и сильную операционную модель. Маржа впечатляет: gross margin около 86%, operating margin около 28%, net margin свыше 21%, а ROE, ROA и ROI находятся на сильных уровнях и заметно выше отраслевых ориентиров. При этом динамика эффективности не ускоряется: ROE и ROA немного снизились относительно более ранних значений, что говорит скорее о стабилизации, чем о новом витке улучшения. Баланс в целом крепкий благодаря значительному объёму cash on hand и высокой quick ratio, но current ratio просел до 1.47, что хуже отраслевой медианы и заметно слабее прошлых уровней. Долговая нагрузка умеренная, однако debt/equity выше медианы отрасли, а долгосрочный долг практически не снижается, поэтому финансовый риск не нулевой. Главный сдерживающий фактор для оценки — экстремально высокие мультипликаторы: P/E, P/S, P/B и P/FCF существенно выше медианы отрасли, что оставляет мало запаса прочности для дальнейшего расширения оценки. Особенно важно, что такие премиальные коэффициенты уже заложили в цену сильное качество бизнеса и высокую рентабельность. Дивидендов компания не платит, поэтому инвестор не получает дополнительной поддержки через cash yield. В сумме фундаментал оправдывает премию к рынку, но не настолько высокую, как текущие мультипликаторы и цена акций предполагают сейчас. Для консервативного 1-летнего прогноза это скорее аргумент в пользу умеренного снижения целевой цены, чем её повышения. Сильные стороны — устойчивый рост выручки, высокая маржинальность, сильная генерация прибыли и большой запас ликвидности. Слабые стороны — очень дорогая оценка, отсутствие дивидендов и некоторое ухудшение краткосрочной ликвидности по current ratio.

Cadence Design Systems, Inc.

Сильный индекс, без изменений. Быки в растерянности.

Strong index, flat. The bulls are confused.

Сильный индекс, без изменений. Рынок не поддерживает быков.

Strong index, flat. The market does not support the bulls.

Средний индекс, значительно упал. Отток средств из лонгов резко увеличился и находится на высоком уровне.

Medium index, significantly down. The outflow of funds from longs has increased sharply and is at a high level.

Сильная рентабельность и рост Cadence сочетаются с очень дорогой оценкой и слабым запасом по current ratio, поэтому прогноз стоит умеренно снизить.

Synopsys’ SNPS Design IP segment faced pressure in the second quarter of fiscal 2026. Revenues declined to $454.2 million from $482 million in the year-ago quarter, while adjusted operating margin fell to 24% from 31%. The weakness was not limited to a single quarter, as the segment’s adjusted operating margin for the first six months of fiscal 2026 was 21%, down from 30% in the same period last year.
Furthermore, Synopsys continues to carry a sizable debt load following its recent acquisitions and strategic investments. As of April 30, 2026, the company had $10.014 billion in long-term debt compared with $2.484 billion in cash, cash equivalents and short-term investments. The debt burden is contributing to higher financing costs, affecting the bottom line.
The Design IP segment experienced margin pressure in the second quarter of fiscal 2026 as Synopsys continued to reposition the business toward higher-growth artificial intelligence opportunities. Management attributed the decline primarily to reduced revenues as resources are being reallocated toward the most attractive AI-driven markets, including custom silicon and hyperscaler demand.
Despite the near-term weakness, Synopsys expects the IP business to recover sequentially through the second half of fiscal 2026, supported by its expanding pipeline in high-speed connectivity, UCIe, HBM4 memory interfaces and customized AI silicon solutions. As these premium offerings gain traction, the company believes the Design IP business will generate higher-value engagements and stronger long-term profitability, making the current margin pressure largely an investment in future growth.
How Competitors Fare Against SNPS
Synopsys faces tough competition from EDA vendors, such as Cadence Design Systems Inc. CDNS and Keysight Technologies KEYS. These companies offer products focused more on distinct phases of the IC design process and provide a range of services to companies throughout the world to help optimize their product development process, among other things.
Keysight Technologies competes in the electronic design and testing space, particularly providing software solutions for electromagnetic analysis, circuit simulation and hardware verification. Cadence benefits from higher design complexity and rising customer spend on AI-driven automation.
Amid rapid AI proliferation, the Cadence.ai portfolio has been gaining strength, and the new product launches like AgentStack, along with ChipStack, ViraStack and InnoStack AI Super Agents, are expected to aid in sustaining the momentum.
SNPS’ Price Performance, Valuation and Estimates
Shares of SNPS have lost 2.9% year to date compared with the Zacks Computer - Software industry’s decline of 19.6%.
SNPS YTD Performance Chart
Image Source: Zacks Investment Research
From a valuation standpoint, SNPS trades at a forward price-to-sales ratio of 8.50X, higher than the industry’s average of 6.35X.
SNPS Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for SNPS’ fiscal 2026 earnings is pegged at $14.75, indicating 14.3% year-over-year growth. Estimates have been revised upward in the past 30 days.
Image Source: Zacks Investment Research
SNPS currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Can Synopsys' Design IP Business Rebound in Fiscal 2026?

Cadence Design Systems (CDNS) closed at $385.35 in the latest trading session, marking a -1.42% move from the prior day. The stock's performance was ahead of the S&P 500's daily loss of 1.62%. Meanwhile, the Dow experienced a drop of 1.87%, and the technology-dominated Nasdaq saw a decrease of 1.98%.
The stock of maker of hardware and software products for validating chip designs has risen by 9.18% in the past month, leading the Computer and Technology sector's loss of 0.74% and the S&P 500's loss of 0.03%.
Market participants will be closely following the financial results of Cadence Design Systems in its upcoming release. It is anticipated that the company will report an EPS of $2.05, marking a 24.24% rise compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.58 billion, up 23.58% from the year-ago period.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $7.94 per share and revenue of $6.2 billion, indicating changes of +11.2% and +17.11%, respectively, compared to the previous year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Cadence Design Systems. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational 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 last 30 days, the Zacks Consensus EPS estimate has remained unchanged. Right now, Cadence Design Systems possesses a Zacks Rank of #3 (Hold).
From a valuation perspective, Cadence Design Systems is currently exchanging hands at a Forward P/E ratio of 49.24. This indicates a premium in contrast to its industry's Forward P/E of 17.21.
We can additionally observe that CDNS currently boasts a PEG ratio of 3.63. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As of the close of trade yesterday, the Computer - Software industry held an average PEG ratio of 1.4.
The Computer - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 161, finds itself in the bottom 35% echelons of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.
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Cadence Design Systems (CDNS) Stock Moves -1.42%: What You Should Know

Synopsys SNPS is gaining from a multi-trillion-dollar AI infrastructure buildout, driving strong system-level and semiconductor R&D spending and robust AI compute design activity. Synopsys is embedding AI across its product portfolio to automate engineering workflows and improve customer productivity.
Synopsys is looking at AI as a strategy that the company is implementing in multiple layers. Synopsys has implemented AI in its product layer, which it calls XSO.ai. Second is customer-specific AI, where customers train AI on their own workflow to create knowledge-assistant tools. Synopsys is also implementing Agentic generative AI now.
Synopsys also provides DSO.ai and VSO.ai. DSO.ai is an optimization engine focused on tape-outs, while VSO.ai is being used more deeply in SoC blocks and verification workflows. Synopsys’ customers have used DSO.ai to optimize more than 700 cumulative tape-outs, and VSO.ai has been deployed in up to 90% of SoC blocks on some chips.
Synopsys gains from decades of deep engineering expertise, proprietary codebases and solvers, silicon-proven design technologies and foundry co-optimization capabilities. The company has been able to provide its customers with up to 50% faster knowledge assistance, 70% faster workflow assistance and 5x faster formal testbench generation.
Synopsys is using AI in two ways, which include making chip design faster and better and preparing for a broader shift where AI becomes a more autonomous workflow layer across design, verification and simulation. These factors are likely to keep SNPS as one of the key contributors in the AI value chain in the long term.
How Competitors Fare Against SNPS
Synopsys faces tough competition from EDA vendors, such as Cadence Design Systems Inc. CDNS and Keysight Technologies KEYS. These companies offer products focused more on distinct phases of the IC design process and provide a range of services to companies throughout the world to help optimize their product development process, among other things.
Keysight Technologies competes in the electronic design and testing space, particularly providing software solutions for electromagnetic analysis, circuit simulation and hardware verification. Cadence benefits from higher design complexity and rising customer spend on AI-driven automation.
Amid rapid AI proliferation, the Cadence.ai portfolio has been gaining strength, and the new product launches like AgentStack, along with ChipStack, ViraStack and InnoStack AI Super Agents, are expected to aid in sustaining the momentum.
SNPS’ Price Performance, Valuation and Estimates
Shares of SNPS have gained 5.2% year to date against the Computer - Software industry’s decline of 10.2%
SNPS YTD Performance Chart
Image Source: Zacks Investment Research
From a valuation standpoint, SNPS trades at a forward price-to-sales ratio of 9.23X, higher than the industry’s average of 7.1X.
SNPS Forward 12-Month (P/S) Performance Chart
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for SNPS’ fiscal 2026 earnings is pegged at $14.49, indicating 12% year-over-year growth. Estimates have been revised upward in the past seven days.
Image Source: Zacks Investment Research
SNPS currently carries a Zacks Rank #4 (Sell).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Synopsys' AI Strategy: Is it a Key Driver of Future Expansion?

Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Vanguard Information Technology ETF (Symbol: VGT) where we have detected an approximate $760.6 million dollar inflow -- that's a 0.5% increase week over week in outstanding units (from 1,210,287,937 to 1,216,481,563). Among the largest underlying components of VGT, in trading today Intuit Inc (Symbol: INTU) is off about 1.7%, Synopsys Inc (Symbol: SNPS) is down about 3.1%, and Cadence Design Systems Inc (Symbol: CDNS) is lower by about 5.2%. For a complete list of holdings, visit the VGT Holdings page » The chart below shows the one year price performance of VGT, versus its 200 day moving average:
Looking at the chart above, VGT's low point in its 52 week range is $77.6677 per share, with $126 as the 52 week high point — that compares with a last trade of $118.91. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Further VGT Research:
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Noteworthy ETF Inflows: VGT, INTU, SNPS, CDNS

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? We'll need to take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Adobe Systems is sporting a Zacks Rank of #2 (Buy), while Cadence Design Systems has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ADBE has an improving earnings outlook. However, value investors will care about much more than just this.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
ADBE currently has a forward P/E ratio of 11.13, while CDNS has a forward P/E of 52.46. We also note that ADBE has a PEG ratio of 0.83. 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. CDNS currently has a PEG ratio of 3.87.
Another notable valuation metric for ADBE is its P/B ratio of 9.27. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, CDNS has a P/B of 17.5.
These metrics, and several others, help ADBE earn a Value grade of B, while CDNS has been given a Value grade of F.
ADBE is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that ADBE is likely the superior value option right now.
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ADBE or CDNS: Which Is the Better Value Stock Right Now?

Synopsys, Inc. SNPS shares have appreciated 8.2% year to date, outperforming the Zacks Computer - Software industry’s decline of 6.9%.
SNPS YTD Performance Chart
Image Source: Zacks Investment Research
The outperformance in the stock price led to a premium valuation, with SNPS stock trading at a P/E multiple of 44.45x, much above the industry P/E multiple of 24.02x. The premium valuation is further established by the Zacks Value Score of F.
SNPS Forward 12-Month Valuation Chart
Image Source: Zacks Investment Research
Given these dynamics, investors are wondering if it’s the right time to buy, sell or hold the stock? Let’s dive into the fundamentals and financials of the stock and discuss what investors should do with SNPS right now.
SNPS’ Design IP Business is Under Pressure
Synopsys gains from multi-trillion-dollar AI infrastructure buildout, driving strong system-level and semiconductor R&D spending and robust AI compute design activity. Synopsys is embedding AI across its product portfolio to automate engineering workflows and improve customer productivity.
While generative AI could disrupt software companies. Synopsys gains from decades of deep engineering expertise, proprietary codebases and solvers, silicon-proven design technologies and foundry co-optimization capabilities. The company has been able to provide its customers with up to 50% faster knowledge assistance, 70% faster workflow assistance and 5x faster formal testbench generation.
Despite strength in some parts of its portfolio, SNPS’ Design IP segment faced pressure in the second quarter of fiscal 2026. Revenues declined to $454.2 million from $482 million in the year-ago quarter, while adjusted operating margin fell to 24% from 31%. The weakness was not limited to a single quarter, as the segment’s adjusted operating margin for the first six months of fiscal 2026 was 21%, down from 30% in the same period last year.
Synopsys continues to carry a sizable debt load following its recent acquisitions and strategic investments. As of April 30, 2026, the company had $10.014 billion in long-term debt, compared with $2.484 billion in cash, cash equivalents and short-term investments. The debt burden is contributing to higher financing costs, affecting the bottom line.
The Zacks Consensus Estimate for SNPS’ fiscal 2026 earnings is pegged at $14.49, indicating 12% year-over-year growth. Estimates have been revised upward in the past seven days.
Image Source: Zacks Investment Research
SNPS Faces Stiff Competition in EDA Space
The company faces tough competition from EDA vendors, such as Cadence Design Systems Inc. CDNS, Keysight Technologies KEYS and Siemens SIEGY. These companies offer products focused more on distinct phases of the IC design process and provide a range of services to companies throughout the world to help optimize their product development process, among other things.
Keysight Technologies competes in the electronic design and testing space, particularly providing software solutions for electromagnetic analysis, circuit simulation and hardware verification. Cadence benefits from higher design complexity and rising customer spend on AI-driven automation.
Amid rapid AI proliferation, the Cadence.ai portfolio has been gaining strength, and the new product launches like AgentStack, along with ChipStack, ViraStack and InnoStack AI Super Agents, are expected to aid in sustaining the momentum. Siemens EDA, Siemens' electronic design automation division and Cadence Design Systems both provide EDA tools, including software, hardware and services essential for designing chips and semiconductor devices.
Conclusion
Synopsys remains well-positioned to benefit from the accelerating AI-driven semiconductor and infrastructure spending cycle, supported by its strong EDA leadership. However, investors should not ignore the challenges. The weakness in the Design IP business, margin compression, a significantly higher debt burden and intense competition from Cadence, Keysight and Siemens EDA could weigh on near-term performance. Moreover, the stock’s premium valuation leaves limited room for execution missteps. Considering these factors, we suggest that investors should stay away from this Zacks Rank #4 (Sell) stock at present.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

SNPS Rises 8.2% YTD: Should Investors Hold or Fold the Stock?

Key Points
COMPUTEX 2026 is set to run this week in Taipei, Taiwan.
Nvidia CEO Jensen Huang is scheduled to deliver a keynote ahead of COMPUTEX on Monday, June 1, at 11 a.m. local time (Sunday, May 31, at 11 p.m. ET).
During COMPUTEX 2024, Nvidia stock surged 10.4%, versus the S&P 500's 1.4% gain.
COMPUTEX 2026 is set to run from Tuesday, June 2, to Friday, June 5, local time at the Taipei Nangang Exhibition Center in Taipei, Taiwan. (The dates generally correspond to June 1 to June 4 in the United States, with Eastern time lagging Taipei time by 12 hours.)
COMPUTEX is one of the world's largest annual trade shows focused on technology and computer hardware. Global industry giants unveil and launch innovative new products in artificial intelligence (AI) and computing, robotics and mobility, and next-generation technology.
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Nvidia (NASDAQ: NVDA) CEO Jensen Huang is scheduled to deliver a keynote ahead of COMPUTEX on Monday, June 1, at 11 a.m. local time (Sunday, May 31, at 11 p.m. ET). The AI chip and infrastructure leader is calling its pre- and extra-trade-show events "GTC Taipei." GTC (GPU Technology Conference) is the name of Nvidia's huge annual AI trade show held in Silicon Valley in March. The company also held a GTC in Washington, D.C., this year.
Will Nvidia stock get a lift from Huang's presentation or those of other Nvidia executives who are presenting throughout the week?
Nvidia stock got a nice boost during COMPUTEX 2024
Nvidia stock got a nice boost during COMPUTEX 2024, though it didn't last year.
What products did Nvidia unveil, announce, or launch at COMPUTEX 2024?
Nvidia unveiled several new data center and gaming products during COMPUTEX 2024. I think Huang's biggest announcement -- and perhaps the one investors liked most -- was that the company was accelerating its release cadence for new data center graphics processing unit (GPU) architecture to once a year from every other year. Huang previewed the planned GPU architectures for the next couple of years.
Huang also announced the widespread adoption of the company's Spectrum-X Ethernet networking platform, which the company touts as the world's first Ethernet fabric for AI. Huang also said that Nvidia planned to launch new Spectrum-X products every year.
Besides Huang, what other Nvidia execs are speaking at COMPUTEX 2026?
On June 2 at 9:30 a.m. local time (June 1, 9:30 p.m. ET), Nvidia's head of robotics and edge AI, Deepu Talla, is presenting, "Physical AI at Scale: From Simulation to Real-World Robots."
On June 4 at 9:30 a.m. local time (June 3, 9:30 p.m. ET), Kevin Deierling, Sr. VP of Networking, is presenting, "Extreme Co-Design: Building the AI Factory."
There may be others, too.
What other major publicly traded companies are participating in COMPUTEX 2026?
Here's a partial listing from the COMPUTEX site: Intel, Marvell Technology, Microsoft, Alphabet's Google, Qualcomm, Samsung, Vertiv, NXP Semiconductors, Infineon Technologies, Synopsys, Cadence Design Systems, Texas Instruments, Siemens, Super Micro Computer, Monolithic Power Systems, and Schneider Electric.
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Beth McKenna has positions in Nvidia. The Motley Fool has positions in and recommends Alphabet, Cadence Design Systems, Intel, Marvell Technology, Microsoft, Monolithic Power Systems, NXP Semiconductors, Nvidia, Qualcomm, Schneider Electric, Synopsys, Texas Instruments, and Vertiv. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Will Nvidia Stock Rise During June 1 to June 4 From CEO Jensen Huang's Participation in COMPUTEX 2026?

Cadence Design Systems, Inc. (CDNS) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, CDNS's 50-day simple moving average broke out above its 200-day moving average; this is known as a "golden cross."
There's a reason traders love a golden cross -- it's a technical chart pattern that can indicate a bullish breakout is on the horizon. This kind of crossover is formed when a stock's short-term moving average breaks above a longer-term moving average. Typically, a golden cross involves the 50-day and the 200-day moving averages, since bigger time periods tend to form stronger breakouts.
Golden crosses have three key stages that investors look out for. It starts with a downtrend in a stock's price that eventually bottoms out, followed by the stock's shorter moving average crossing over its longer moving average and triggering a trend reversal. The final stage is when a stock continues the upward climb to higher prices.
This kind of chart pattern is the opposite of a death cross, which is a technical event that suggests future bearish price movement.
Shares of CDNS have been moving higher over the past four weeks, up 13.4%. Plus, the company is currently a #3 (Hold) on the Zacks Rank, suggesting that CDNS could be poised for a breakout.
Once investors consider CDNS's positive earnings outlook for the current quarter, the bullish case only solidifies. No earnings estimate has gone lower in the past two months compared to 2 revisions higher, and the Zacks Consensus Estimate has increased as well.
Investors should think about putting CDNSon their watchlist given the ultra-important technical indicator and positive move in earnings estimates.
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Cadence Design Systems (CDNS)'s Technical Outlook is Bright After Key Golden Cross

It has been about a month since the last earnings report for Cadence Design Systems (CDNS). Shares have added about 17.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Cadence due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for Cadence Design Systems, Inc. before we dive into how investors and analysts have reacted as of late.
Cadence Q1 Earnings Top Estimates
Cadence delivered a strong first quarter of 2026, driven by broad-based demand for its AI-oriented portfolio amid robust design activity. Non-GAAP earnings per share (EPS) of $1.96 beat the Zacks Consensus Estimate by 4.3%, increased 24.8% year over year and topped management’s guided range of $1.89 to $1.95.
Revenues of $1.474 billion beat the Zacks Consensus Estimate by 1.7% and increased 19% year over year. The figure beat management’s guided range of $1.42-$1.46 billion.
On theearnings call the company emphasized its agentic AI strategy, including the launch of AgentStack 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.
A standout metric was a record backlog of $8 billion, driven by strong bookings. Strong backlog and accelerating AI demand led to a raise in its 2026 revenue outlook.
Cadence raised its full-year 2026 revenue outlook to a band of $6.125-$6.225 billion, compared with the earlier guided range of $5.9-$6 billion. The Zacks Consensus Estimate is currently $5.99 billion.
Non-GAAP EPS for 2026 is now expected to be between $7.85 and $7.95, compared with the earlier guided range of $8.05 to $8.15. The Zacks Consensus Estimate is currently pinned at $8.16 per share.
Cadence noted that the bottom-line performance would primarily be impacted by Hexagon’s Design & Engineering business acquisition, which will add about $160 million to revenues but would be dilutive to the bottom line by nearly 28 cents. The deal was funded using 70% cash and 30% stock. It expects the buyout to be accretive in 2027.
Segment Performance
Product & Maintenance revenues (91.5% of total revenues) of $1.349 billion rose 21.4% year over year. Services revenues (8.5%) of $125 million fell 4.6% year over year.
Recurring revenues comprised 77% of total revenues, while the remaining were upfront revenues.
The Americas contributed 45% of revenues, while China accounted for 13%, Other Asia 20%, Europe, Middle East and Africa 16% and Japan 6%, pointing to diversified demand across geographies.
Product-wise, Core EDA, Intellectual Property (“IP”) and Systems Design & Analysis accounted for 71%, 14% and 15% of total revenues, respectively.
The System Design & Analysis business, up 18% in the first quarter, is gaining from higher demand for 3D-IC, Sigrity and Clarity.
Core EDA business, which includes Custom IC, Digital IC and Functional Verification, experienced 18% year-over-year growth.
The demand for new hardware systems continued to gain traction, driven by AI/HPC, automotive and robotics. Apart from Palladium and Protium systems, solutions such as Xcelium, Verisium SimAI and ChipStack are being explored by customers, with large evaluations underway, added Cadence. Cerebrus and AI-driven Virtuoso Studio are also seeing strong momentum.
The IP business was up 22% year over year in the first quarter, benefiting from a broadening silicon solutions portfolio and increasing demand for solutions in AI, HPC and automotive use cases. The company is 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.
Profitability Numbers
Non-GAAP gross margin contracted 40 basis points (bps) to 88%.
Total non-GAAP costs and expenses increased 12.6% year over year to $815 million.
However, non-GAAP operating margin expanded 300 bps on a year-over-year basis to 44.7%.
Balance Sheet & Cash Flow
As of March 31, 2026, Cash and cash equivalents were $1.407 billion compared with $3 billion as of Dec. 31, 2025.
Long-term debt was $2.481 billion as of March 31, 2026, compared with $2.48 billion as of Dec. 31.
Cadence generated an operating cash flow of $356 million in the reported quarter compared with the prior quarter’s $553 million. Free cash flow was $307 million compared with $512 million in the previous quarter.
The company repurchased its shares worth $200 million in the first quarter.
Outlook
Non-GAAP operating margin for 2026 is now forecasted to be in the band of 43.5% to 44.5%, compared with 44.75% to 45.75% range guided earlier.
Also, operating cash flow is expected to be in the range of $1.875 billion to $1.975 billion compared with $2 billion projected earlier. The company expects to utilize at least 50% of its free cash flow to repurchase shares in 2026.
For the second quarter of 2026, revenues are estimated to be $1.555-$1.595 billion. 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.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a upward trend in estimates revision.
The consensus estimate has shifted 12.89% due to these changes.
VGM Scores
At this time, Cadence has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock has a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Cadence has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Cadence belongs to the Zacks Computer - Software industry. Another stock from the same industry, SAP (SAP), has gained 1% over the past month. More than a month has passed since the company reported results for the quarter ended March 2026.
SAP reported revenues of $11.18 billion in the last reported quarter, representing a year-over-year change of +17.9%. EPS of $2.01 for the same period compares with $1.51 a year ago.
For the current quarter, SAP is expected to post earnings of $2.06 per share, indicating a change of +21.2% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.8% over the last 30 days.
SAP has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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Cadence (CDNS) Up 17.4% Since Last Earnings Report: Can It Continue?

Among the underlying components of the S&P 500 index, we saw noteworthy options trading volume today in Loews Corp. (Symbol: L), where a total of 5,677 contracts have traded so far, representing approximately 567,700 underlying shares. That amounts to about 67.6% of L's average daily trading volume over the past month of 839,605 shares. Particularly high volume was seen for the $115 strike call option expiring June 18, 2026, with 5,571 contracts trading so far today, representing approximately 557,100 underlying shares of L. Below is a chart showing L's trailing twelve month trading history, with the $115 strike highlighted in orange:
Cadence Design Systems Inc (Symbol: CDNS) saw options trading volume of 15,350 contracts, representing approximately 1.5 million underlying shares or approximately 63.4% of CDNS's average daily trading volume over the past month, of 2.4 million shares. Particularly high volume was seen for the $400 strike call option expiring August 21, 2026, with 5,026 contracts trading so far today, representing approximately 502,600 underlying shares of CDNS. Below is a chart showing CDNS's trailing twelve month trading history, with the $400 strike highlighted in orange:
And Ford Motor Co. (Symbol: F) options are showing a volume of 404,294 contracts thus far today. That number of contracts represents approximately 40.4 million underlying shares, working out to a sizeable 60% of F's average daily trading volume over the past month, of 67.4 million shares. Especially high volume was seen for the $14 strike call option expiring May 22, 2026, with 32,882 contracts trading so far today, representing approximately 3.3 million underlying shares of F. Below is a chart showing F's trailing twelve month trading history, with the $14 strike highlighted in orange:
For the various different available expirations for L options, CDNS options, or F options, visit StockOptionsChannel.com.
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Periodand min./max. price, $	Price change, %		Volatility, %		Volume, $
Periodand min./max. price, $	CDNS	Industry	CDNS	Industry	Volume, $
Yesterday 382.2 - 399.2	1.64	10.44	1.74	1.99	337.08M
Week 373.5 - 415.8	-4.41	13.75	1.49	4.73	3.34B
Month 331.6 - 416.7	8.55	25.74	6.42	10.23	13.67B
3 Months 263.4 - 416.7	32.21	41.55	17.00	20.51	35.39B
6 Months 262.7 - 416.7	15.33	31.78	22.66	33.26	65.64B
Year 262.7 - 416.7	27.37	50.66	38.87	49.48	109.01B
3 years 217.8 - 416.7	69.76	58.60	63.16	89.36	217.68B
5 years 126.7 - 416.7	204.64	107.37	80.82	116.98	280.32B
All time 2.4 - 329.0	1,518.17	50.56	—	—	166.39B

Cadence Design Systems, Inc.

Price and volatility history

Risk ratios