In a report released yesterday, Vivek Arya from Bank of America Securities reiterated a Buy rating on Cadence Design (CDNS – Research Report), with a price target of $350.00.
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Vivek Arya has given his Buy rating due to a combination of factors that highlight Cadence Design’s strong market position and growth potential. The company is expected to maintain a robust double-digit sales growth, driven by increasing chip complexity, with a forecasted 12% overall growth and 14% excluding China by FY25. Cadence Design also has the opportunity to expand its market share with over $1 billion in additional addressable opportunities at major clients like Intel and Samsung, which are currently served by competitors.
Furthermore, the company’s strategic focus on organic growth and acquisitions in System Design & Analysis and Intellectual Property is expected to grow significantly faster than its core Electronic Design Automation business. Cadence Design’s exposure to China is relatively low, with sales expected to remain flat year-over-year at about 11% of total revenue, which is significantly lower than other semiconductor companies. Additionally, the company is focused on expanding EBIT margins, with a target of 44% by FY25, which is ahead of competitors. Despite ongoing tariff uncertainties, Cadence Design’s software and services-driven model, along with its global supply chain, help mitigate these risks. As a result, Arya has raised the price objective to $350, reflecting the company’s resilience and growth opportunities.
Arya covers the Technology sector, focusing on stocks such as Nvidia, Intel, and Advanced Micro Devices. According to TipRanks, Arya has an average return of 9.0% and a 45.86% success rate on recommended stocks.