Cadence (CDNS) Is Up 6.6% After Raised 2025 Outlook and Key IP Acquisitions – What’s Changed

• Cadence Design Systems reported third-quarter 2025 results, posting revenue of US$1,338.84 million and net income of US$287.12 million, both up from the prior year and above analyst estimates; the company also raised its full-year revenue and adjusted EPS guidance amid strong demand across its electronic design automation, IP, and hardware platforms.
• An important highlight was Cadence’s completion of the Arm Artisan foundation IP acquisition and the signing of a deal to buy Hexagon's D&E business, signaling increased momentum in expanding its market presence.
• We'll examine how Cadence's raised guidance and strong backlog support its investment narrative focused on AI-driven design and growth sectors.

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Cadence Design Systems Investment Narrative Recap

To be a shareholder in Cadence Design Systems, you need to have confidence in the company's ability to deliver sustained innovation in AI-driven electronic design automation and maintain broad-based customer demand, even as competition intensifies. The recent earnings beat and raised guidance reinforce optimism about AI-enabled catalysts and strong backlog, but they don't eliminate the ongoing risks tied to US-China relations, which remain the most significant near-term threat to the business.

Among the latest announcements, Cadence's completion of the Arm Artisan foundation IP acquisition stands out. This move further enriches the company's portfolio and aligns with the ongoing AI and HPC trends cited as key growth drivers, supporting confidence in Cadence's long-term technology and market leadership while presenting some integration risk if synergies prove difficult to realize.

Yet, despite robust operational performance, the real question for investors lies in how potential regulatory or political changes could affect Cadence's exposure to China and...

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

Cadence Design Systems is projected to achieve $6.9 billion in revenue and $1.7 billion in earnings by 2028. This outlook is based on an assumed annual revenue growth rate of 10.9% and a $0.7 billion increase in earnings from the current level of $1.0 billion.

Uncover how Cadence Design Systems' forecasts yield a $370.84 fair value, a 6% upside to its current price.

Exploring Other Perspectives

The Simply Wall St Community has published eight fair value estimates for Cadence stock, ranging widely from US$167.79 to US$401.07. While views differ on price, many remain focused on how the company's AI-focused investments could influence future performance and competitive position.

Explore 8 other fair value estimates on Cadence Design Systems - why the stock might be worth as much as 14% 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 1 key reward 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.

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