In a report released today, Vivek Arya from Bank of America Securities maintained a Buy rating on Cadence Design (CDNS – Research Report), with a price target of $350.00.
Vivek Arya’s rating is based on Cadence Design’s ability to leverage the increasing complexity of chip designs, which supports its ongoing double-digit growth outside of China. Despite current stock pressures due to concerns around China contributions and hardware demand, Arya sees the potential for earnings upgrades that could boost positive momentum in the future.
Although the initial FY25 sales outlook is conservative, particularly concerning China and hardware, Arya notes that the cautious stance may allow for upward adjustments later in the year. The report highlights Cadence Design’s strategic focus on upfront sales, including hardware and IP, which are growing faster and are vital to client relationships. Additionally, a strong backlog and the potential for increased recurring revenue from core EDA services provide further confidence in the company’s growth trajectory.
In another report released on February 20, Berenberg Bank also maintained a Buy rating on the stock with a $348.00 price target.