Analyst Vivek Arya of Bank of America Securities maintained a Buy rating on Cadence Design (CDNS – Research Report), reducing the price target to $350.00.
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Vivek Arya has given his Buy rating due to a combination of factors that highlight Cadence Design’s strategic positioning in the market. One of the key reasons is the company’s unique leverage in addressing chip complexity and the surge in AI design processes, which are critical growth areas in the semiconductor industry. Additionally, the System Design & Analysis (SD&A) segment has shown remarkable performance with significant sequential and year-over-year growth, indicating strong operational execution and market demand.
Despite some deceleration in the Core EDA segment, largely due to challenges in China and slower growth in non-AI semiconductor sectors, the overall business outlook remains positive. The company’s robust backlog, the strength of its hardware portfolio, and the successful integration of recent acquisitions also contribute to this favorable assessment. Furthermore, Cadence Design continues to expand its free cash flow margins, which are expected to grow further, demonstrating its financial resilience and efficiency. These factors collectively underscore the Buy rating, even amid certain market headwinds.
According to TipRanks, Arya is a 5-star analyst with an average return of 17.2% and a 60.00% success rate. Arya covers the Technology sector, focusing on stocks such as Nvidia, Intel, and Marvell.
In another report released today, KeyBanc also maintained a Buy rating on the stock with a $355.00 price target.