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Cadence Design Systems (CDNS) is a provider of software, hardware, and services all over the world. The company is known for developing computational, AI-driven systems, and intellectual property (IP) solutions for scientists and engineers.
With a market cap of $78 billion, the company is building momentum, gaining 17% in the last 5 days. Although the stock is just barely in the green in 2025, it has climbed 44% in the last 2 years, 106% in 3 years, and 266% in the previous 5 years.
Cadence Upgraded By Analyst
Cadence Design has been upgraded from a “Neutral” rating to an “Overweight” rating by JPMorgan analyst Harlan Sur with a target of $325. This indicates upside potential of 7% from the current market level. The analyst noted that the company has shown resilience during a rough macroeconomic period and has a defensive growth profile.
“We are upgrading CDNS to Overweight from Neutral given the CY24 underperformance in the stock (up 10% versus the group at up 20%) combined with the YTD pullback (down 12%), which we believe creates an attractive entry point for this high-quality defensive growth business and offers ~20%+ upside to our new $325 price target,” said Sur in an investor note.
Sur also wrote that management may have been overly cautious at the end of Q4 when the company guided for 2025 revenue between $5.14 billion and $5.22 billion. The analyst argued that the company may be reacting to ongoing macroeconomic headwinds and underestimating its potential. As evidence of this, the company raised its outlook when it reported Q1 results. It now expects 2025 revenue between $5.15 billion and $5.23 billion.
The JPMorgan analyst also noted that Cadence is in the electronic design automation industry, which displayed significant resilience during trade and tariff tensions in 2018. Cadence dropped 15% while the Philadelphia Semiconductor Index tanked 30%.
Analyst Ratings on CDNS Stock
Analysts on the whole have a positive outlook on the California-based company. Cadence has a consensus “Strong Buy” rating from analysts with a mean price target of $319.83, reflecting upside of 5.5% from market levels.
The stock has been reviewed by 18 analysts and has received 15 "Strong Buy” ratings, one “Moderate Buy” rating, one “Hold” rating, and one “Strong Sell” rating from Wall Street.
