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Cadence Design Systems (CDNS) Is Up 8.2% After Strong Results and Easing China Concerns – Has The Bull Case Changed?

Simply Wall St · 2d ago
  • In recent days, Cadence Design Systems has drawn fresh attention after strong quarterly results, raised full-year guidance, and positive commentary on its financial health, alongside CEO Anirudh Devgan’s appearance at the UBS Global Technology and AI Conference 2025 in Scottsdale.
  • Investors also took comfort from the resolution of earlier China-related sales concerns and a low, declining short interest level versus peers, which together point to improving confidence in the company’s outlook.
  • We’ll now examine how the combination of stronger guidance and easing China concerns could influence Cadence’s broader investment narrative.

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Cadence Design Systems Investment Narrative Recap

To own Cadence, you need to believe that demand for advanced electronic design and AI-enabled tools will keep supporting its premium valuation and earnings growth. The key near term catalyst is continued adoption of its AI-driven EDA and IP platforms, while the biggest current risk remains geopolitical and regulatory uncertainty around its substantial China exposure. Recent strong results, raised guidance and easing China sales issues help, but do not remove that risk.

The most relevant update here is Cadence’s raised full year 2025 guidance to US$5.15 billion to US$5.23 billion in revenue and higher GAAP earnings expectations, backed by broad based strength in EDA, IP and system design. This directly supports the thesis that AI and complex chip design demand can sustain growth, which is central to today’s positive sentiment but could be tested again if US China tensions or export rules tighten.

Yet even as China related concerns appear to have eased for now, investors should be aware that...

Read the full narrative on Cadence Design Systems (it's free!)

Cadence Design Systems’ narrative projects $6.9 billion revenue and $1.7 billion earnings by 2028. This requires 10.9% yearly revenue growth and an earnings increase of about $0.7 billion from $1.0 billion today.

Uncover how Cadence Design Systems' forecasts yield a $382.20 fair value, a 13% upside to its current price.

Exploring Other Perspectives

CDNS Community Fair Values as at Dec 2025
CDNS Community Fair Values as at Dec 2025

Eight members of the Simply Wall St Community value Cadence between about US$161 and US$401, showing just how far apart individual views can be. Against that backdrop, the company’s premium pricing and exposure to US China policy decisions give you strong reasons to compare several perspectives before deciding how its growth story might fit your portfolio.

Explore 8 other fair value estimates on Cadence Design Systems - why the stock might be worth as much as 19% more than the current price!

Build Your Own Cadence Design Systems Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

  • A great starting point for your Cadence Design Systems research is our analysis highlighting 2 key rewards that could impact your investment decision.
  • Our free Cadence Design Systems research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Cadence Design Systems' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.