Important points
Electronic design automation company Cadence Design Systems’ stock topped the S&P 500 index on Tuesday after a strong earnings report. The company cited demand for AI-related products as revenue from its Cadence.AI portfolio tripled year-over-year. Cadence’s sales skyrocketed. Intellectual property business, system design and analysis business
Cadence Design Systems (CDNS) stock rose more than 12% on Tuesday, leading the day among S&P 500 stocks after the electronic design automation company reported strong quarterly results and raised its full-year guidance. He was at the top of his performance.
The company, which provides design software, hardware, intellectual property (IP), and other solutions, had revenue of $1.215 billion in the third quarter of 2024, an increase of approximately 19% year over year. Non-GAAP earnings per share (EPS) was $1.64, an increase of more than 30% from the prior-year period. Both numbers exceeded consensus expectations.
Cadence also raised its full-year revenue and non-GAAP earnings expectations.
Q3 Highlights
Cadence specializes in integrated circuits and electronic systems, supporting design processes across industries including communications, automotive, defense, and industrial markets.
Strong demand for artificial intelligence (AI) design products supported Cadence’s strong quarterly results. In its earnings report, the company touted the productivity benefits of its Cadence.AI portfolio, which incorporates generative AI technology and AI-driven big data analytics. Revenue from Cadence.AI nearly tripled year-over-year.
“Customers are achieving great results with Cadence.AI, and we’re excited to see its adoption accelerate as AI quickly becomes an integral part of design workflows,” said CEO Anirudh Devgan. ” states.
Analyst reaction and stock performance
Following the strong results, Baird analysts raised their price target on Cadence Design stock to $340 from $332. Meanwhile, Needham analysts lowered their price target to $315 from $320, but maintained a buy rating.
Cadence Design stock has been volatile so far in 2024. Tuesday’s gains put the stock back in positive territory for the year.
