Cadence Design, the Technology sector company, was revisited by a Wall Street analyst yesterday. Analyst Vivek Arya from Bank of America Securities reiterated a Buy rating on the stock and has a $400.00 price target.
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Vivek Arya has given his Buy rating due to a combination of factors including Cadence Design’s robust performance and strategic positioning. The company exceeded third-quarter revenue and earnings expectations, driven by strong demand in China despite recent export restrictions. This demand was particularly notable in Cadence’s advanced hardware platforms and associated software tools, which contributed to impressive profit margins.
Furthermore, Cadence Design is well-positioned to capitalize on the growing complexity of AI chips, maintaining a record $7 billion backlog. The company’s focus on high-growth, high-margin AI customers and its strategic transition to annual subscription contracts are expected to support sustained growth. Arya also highlights Cadence’s competitive edge over peers, such as higher profitability and a strong relationship with TSMC, justifying the $400 price objective based on future earnings potential.
In another report released today, Needham also maintained a Buy rating on the stock with a $390.00 price target.