Cadence Design Systems, Inc. research snapshot
CDNS AI stock analysis currently reads Cadence Design Systems, Inc. as a high-quality electronic design automation, IP, and engineering software franchise at the center of AI infrastructure design, custom silicon, advanced packaging, and agentic AI. At the August 2, 2026 data cutoff, CDNS closed at $340.02 on July 31, 2026 with a market capitalization near $93.64 billion. Cadence reported Q2 2026 on July 27 with revenue up 24% to $1.584 billion, record backlog of $8.1 billion, and a raise to 19% full year revenue growth, but the stock still trades below its 50-day average after a mid-July pullback tied to agentic AI and open-source chip design headlines. The page uses scenario ranges rather than a certain price prediction, and it is informational research, not investment advice.
Current price
$340.02
Market cap
$93.64 billion
AI score
76 / 100
Rating
High-quality EDA and IP compounder, valuation sensitive
Trend status
Above the 200-day average but below the 50-day average, with neutral RSI after a mid-July pullback
Data cutoff (updated monthly)
August 4, 2026
Informational use only. This page is not investment advice.
| Dimension | Conclusion | Confidence |
|---|---|---|
| Business quality | Cadence sells mission-critical chip, system, verification, IP, hardware, and simulation software; Q2 2026 revenue grew 24% with all product groups in double digits and record backlog of $8.1 billion. | High |
| Moat | Moat comes from deep workflow integration, verification trust, IP libraries, hardware emulation scale, customer design history, partner ecosystems, and an agentic AI portfolio that spans the full design flow. | High |
| Management | Anirudh Devgan and John Wall delivered a beat and raise, lifting FY2026 to 19% revenue growth, but second half margin guidance dips as they invest in Intel, Hexagon D&E integration, and agentic AI. | Medium-high |
| Financial trend | Q2 2026 revenue rose 24% to $1.584 billion, non-GAAP EPS hit $2.11, recurring revenue grew 24%, and FY2026 guidance was raised to $6.26 to $6.34 billion revenue and $8.05 to $8.15 non-GAAP EPS. | High |
| Valuation | At $340.02, CDNS traded near 67.6x TTM EPS, 39.6x forward EPS, 16.0x sales, and 55.8x free cash flow per share, so execution must keep matching the premium. | High |
| Technical trend | Price sits above the 200-day average near $327.63 but below the 50-day average near $371.33 after a mid-July pullback, with RSI near 42.98. | Medium-high |
| Risk level | Main risks are export controls, China revenue exposure, EDA competition, AI demand normalization, open-source and agentic AI disruption headlines, hardware cyclicality, and premium multiple compression. | Medium-high |
| AI confidence | High for historical facts, filings, and math. Medium for forward returns because growth durability and the market multiple drive outcomes. | High data confidence |
| Investment certainty | Medium certainty. CDNS is a quality compounder candidate, but the page gives a research framework, not a buy or sell instruction. | Medium |
CDNS AI stock forecast
The CDNS AI stock forecast uses scenario math around the $340.02 quote. A three-year EPS framework using the FY2026 non-GAAP EPS midpoint of $8.10 produced a bullish value near $425.90, a base value near $315.60, and a bearish value near $206.30. The base-case output sits below the current price, which shows that CDNS already trades at a premium that depends on high growth continuing.
$410 to $445
More likely if Cadence sustains near 19% to 24% revenue growth, agentic AI such as ChipStack, ViraStack, and AuraStack converts to broader add-on monetization, IP stays above 30% growth, Intel, Samsung, and Rapidus engagements expand, and the market keeps a premium software multiple.
$305 to $330
More likely if revenue compounds in the mid-teens, non-GAAP margins hold near 44%, Hexagon D&E integration stays steady, and the forward multiple normalizes toward the high 30s.
$195 to $225
More likely if export restrictions tighten, AI design demand normalizes, open-source or agentic AI compresses EDA pricing power, competitive pressure rises, or the multiple compresses to the low 20s.
CDNS AI technical analysis
CDNS AI technical analysis is constructive but not stretched as of the August 2, 2026 data cutoff. StockAnalysis showed CDNS at $340.02 at the July 31 close, a 50-day moving average near $371.33, a 200-day moving average near $327.63, and RSI near 42.98.
| Level | Value | Why it matters |
|---|---|---|
| Current price | $340.02 | July 31, 2026 closing price used for this static page. |
| Near support | $327 to $335 | The 200-day moving average near $327.63 and the July pullback low near $329.93 define the first key support zone. |
| Secondary support | $262 to $275 | The 52-week low near $262.75 is the main downside reference if the longer-term trend breaks. |
| Near resistance | $360 to $375 | The 50-day moving average near $371.33 is the first upside level to reclaim. |
| Upper resistance | $390 to $417 | The 52-week high near $416.69 and the post-earnings analyst target range are the major upside references. |
| Momentum | RSI 42.98 | RSI is neutral rather than overbought, so the setup allows a rebound if volume supports it. |
| Volume | About 2.1 million shares | July 31 volume came in below the 20-day average near 2.35 million shares, so the bounce lacked heavy participation. |
| Volatility | Beta 1.15 | CDNS moves more than the broad market, so position size should account for earnings and export-control headlines. |
| Invalidation | Close below $327, then $263 | A close below the 200-day average weakens the near-term setup. A break below $262.75 would challenge the longer-term trend. |
CDNS AI trading strategy
The CDNS AI trading strategy is a rules-based framework for a premium-valued software and semiconductor design stock. It is not personalized advice and should be paired with live chart data, position sizing, filings, earnings dates, and a defined invalidation level.
Watch for CDNS to reclaim $360 to $375 with improving volume, hold above the 200-day moving average near $327.63, and build toward the $390 to $417 resistance band.
A close below $327 or a failed breakout after the next earnings report should invalidate the near-term trend setup.
If CDNS pulls back toward the 200-day average near $327.63 without a thesis break, compare the price move with backlog, FY2026 guidance, EDA demand, hardware demand, and export-control news.
Do not average down without a maximum loss rule because premium-multiple software stocks can reset quickly when growth expectations fall.
Track Core EDA growth, IP growth, System Design and Analysis growth, hardware record, backlog conversion, non-GAAP operating margin, Intel and Samsung engagements, Hexagon D&E integration milestones, and buybacks.
Reduce confidence if revenue growth depends on temporary AI ordering, China pull-forward demand, or acquisition contribution while organic design activity weakens.
Investment research summary
Cadence helps engineering teams design, verify, simulate, and optimize chips, systems, IP, and physical products before expensive manufacturing or deployment decisions are made.
The moat is built from workflow lock-in, accuracy trust, accumulated IP, hardware emulation capacity, customer design history, partner ecosystems, and agentic AI breadth across the full electronic design flow.
The thesis fails if AI design demand normalizes, export controls block key customers, open-source or agentic AI disrupts EDA pricing, a competitor gains share in core flows, or the premium multiple compresses sharply.
Management paired record backlog with a raise to 19% FY2026 revenue growth, but the next test is integrating Hexagon D&E, funding Intel and agentic AI investments, and keeping second half margins from dipping too far.
Cadence sits inside long-duration growth in AI infrastructure, custom silicon, 3D-IC, automotive electronics, digital twins, HPC, and advanced system simulation.
The current price implies confidence that high growth and premium margins persist. Margin of safety is limited unless earnings compound faster than multiple compression.
Source-backed data
Every metric below includes a source and last verification date.
| Metric | Value | Source | Last verified |
|---|---|---|---|
| CDNS price | $340.02 at the July 31, 2026 close | StockAnalysis quote and statistics page | August 2, 2026 |
| Market capitalization | $93.64 billion, verified as $340.02 x 275.39 million shares | financial_rigor.py market cap verification and StockAnalysis | August 2, 2026 |
| Q2 2026 revenue | $1.584 billion, up 24% year over year | Cadence Q2 2026 earnings release and call transcript | August 2, 2026 |
| FY2025 revenue | $5.297 billion, compared with $4.641 billion in 2024 | Cadence FY2025 financial results | August 2, 2026 |
| TTM revenue and EPS | $5.84 billion revenue and $5.03 EPS on a trailing twelve month basis | StockAnalysis statistics and quote page | August 2, 2026 |
| Q2 2026 backlog and EPS | Record backlog of $8.1 billion, GAAP EPS of $1.33, and non-GAAP EPS of $2.11 | Cadence Q2 2026 earnings call transcript | August 2, 2026 |
| Cash and debt | $1.44 billion cash and $2.50 billion debt principal at June 30, 2026 | Cadence Q2 2026 earnings call transcript | August 2, 2026 |
| 2026 guidance | $6.26 billion to $6.34 billion revenue, $8.05 to $8.15 non-GAAP EPS, and roughly $2 billion operating cash flow | Cadence Q2 2026 earnings call transcript | August 2, 2026 |
| Valuation ratios | 67.60x TTM PE, 39.61x forward PE, 16.04x sales, and 55.78x price to free cash flow | StockAnalysis statistics and financial_rigor.py valuation check | August 2, 2026 |
| Technical snapshot | 50-day average $371.33, 200-day average $327.63, RSI 42.98, beta 1.15 | StockAnalysis stock price statistics | August 2, 2026 |
| Analyst consensus | Strong Buy with an average price target of $403.67 from 26 analysts, ranging from $300 to $470 | StockAnalysis forecast page | August 2, 2026 |
This CDNS AI stock analysis page is an informational research tool, not investment advice, a recommendation, or a guarantee of future returns. Forecast ranges are scenarios based on available public data, valuation assumptions, and technical snapshots as of the data cutoff, and they may be wrong.
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