Cadence Design Systems, Inc. (CDNS)

Over the past six months, Cadence Design Systems' stock has experienced several notable events. The company reported strong third-quarter 2025 results, surpassing revenue and earnings expectations, and raised its full-year 2025 outlook, projecting approximately 14% revenue growth and 18% EPS growth year-over-year. The company reported a significant backlog exceeding $7 billion, indicating robust demand and future revenue visibility. Cadence is actively capitalizing on the AI megatrend, expanding partnerships with major semiconductor companies and acquiring Arm Artisan Foundation IP. Cadence entered into an agreement to acquire Hexagon AB's Design & Engineering business, including MSC Software, for approximately €2.7 billion. The company collaborated with NVIDIA to expand its Reality Digital Twin Platform. As of October 27, 2025, CDNS stock was up 22.98% over the past six months and 39.02% over the past year. There has been noted insider selling activity, and members of Congress also made three sales of CDNS stock during this period. Cadence's forecast for fourth-quarter profit was slightly below market estimates, partly due to ongoing US-China trade tensions.

Cadence Design Systems' revenue is predominantly subscription-based, with 85% of its quarterly earnings coming from software and IP licensing, which provides a stable revenue stream. CDNS stock has shown a seasonal bullish trend in most months, with September and December being exceptions. The accelerating AI megatrend is fueling an unprecedented wave of design activity, driving multi-year growth in EDA software, IP, and hardware. Customer trends towards custom silicon and chiplet architectures are also acting as ongoing demand catalysts. Despite some analyst projections implying potential demand headwinds, the company's recent Q3 2025 results, record backlog, and raised full-year outlook suggest robust and broad-based demand across its product categories and geographies.

Cadence Design Systems operates in the technology sector, focusing on software and semiconductors. Its core business involves developing electronic design automation (EDA) software and hardware for designing integrated circuits (ICs), systems on chips (SoCs), and printed circuit boards (PCBs). Cadence licenses intellectual property for various industries, including electronics, aerospace, defense, and automotive, and is expanding into areas like pharmaceutical drug design, machine design, and digital twins. Major products include Integrated Circuit Software, Digital Implementation and Signoff Tools, System Verification tools, Hardware Emulation and Prototyping systems, SIP Blocks, PCB and Packaging Technologies, Systems Design and Analysis tools, Machine Design and Digital Twins platforms, AI-driven tools, and the Cadence Millennium Enterprise Multiphysics Platform.

Cadence Design Systems has a strong international network with operations across North America, Europe, and Asia. The company's headquarters are in San Jose, California, U.S. Its global presence includes subsidiaries and offices in countries such as the United States, Germany, Canada, Japan, Italy, Indonesia, and the Russian Federation.

Cadence Design Systems has maintained a strong brand reputation, driven by its leadership in electronic design automation and its strategic advancements in emerging technologies. The company's ability to quickly recover customer acquisition costs suggests a highly differentiated product offering and a robust brand. Cadence is recognized as a market leader in AI and digital twins, pioneering computational software applications to accelerate innovation in engineering design. Its strategic investments in AI-driven design and verification tools have led to significant performance improvements for customers and are expected to drive future revenue growth.

Cadence Design Systems is largely controlled by institutional shareholders, who collectively own a significant portion of the company, estimated at around 87% or 68.01% of shares. Major institutional owners include BlackRock, Inc., Vanguard Group Inc, State Street Corp, Jennison Associates Llc, Fmr Llc, Geode Capital Management, Llc, Invesco Qqq Trust, Series 1 and Alliancebernstein L.p.. Lip Bu Tan is noted as the largest individual shareholder, owning 5.40 million shares, representing 1.98% of the company. Shiuping Chao is also mentioned as a significant insider owner. Collectively, insider ownership is reported to be under 1% of the company.