Cadence Design Systems

Shares of electronic design automation company Cadence Design Systems (CDNS -10.44%) dropped late Wednesday, finishing the day down 10.4%.» Mehr auf fool.com

Shares of semiconductor software design companies Cadence and Synopsys were falling hard on the news.» Mehr auf barrons.com

Live Updates Live Coverage Updates appear automatically as they are published. What’s Priced In 1:58 pm Synopsys enters earnings with momentum and strong buy-side support. The stock is up 14% this month and near record highs, reflecting investor confidence in AI chip design tailwinds and predictable cash flow generation. Analyst sentiment is overwhelmingly bullish, with most firms rating SNPS a Buy and few visible bear cases. But with the stock already priced for high-teens growth and 80%+ gross margins, the room for upside depends on the strength of forward guidance and clarity on the Ansys deal. What’s priced in now is continued high-single-digit to low-double-digit revenue growth, clean margin execution, and minimal integration risk from Ansys. The stock could break higher if Synopsys beats on EPS and shows clear visibility into 2H bookings, especially in AI-specific workloads. A surprise expansion in licensing or EDA demand tied to generative AI models — or a new design win in hyperscaler silicon — would justify a higher multiple. In this setup, precision and confidence on the call will matter as much as the actual numbers. Stock Will Jump If AI Demand and Ansys Messaging Align 12:51 pm Synopsys is well positioned, but shares could break to new highs if the company reports strong EDA segment growth — particularly above 15% YoY — to reinforce its role as a key enabler of AI silicon design. This would validate sector-wide strength seen at Cadence and show Synopsys is capturing the bulk of new AI tape-outs. Equally important: IP licensing revenue. If that line item shows strength, it suggests Synopsys is monetizing design wins at premium pricing, which could drive upward revisions. Maintaining gross margins above 80%, even with the Ansys integration on the horizon, would reassure investors on profitability durability. But the biggest swing factor may be management’s Ansys commentary — clear guidance on timing, synergy capture, and customer overlap strategy could solidify confidence in the acquisition’s ROI. Add in clean H2 backlog visibility, and SNPS could deliver a breakout quarter. 5 Keys to Watch 11:56 am 1. AI-Driven EDA Demand AI chip design is booming. Investors are watching how much incremental EDA and IP licensing demand Synopsys captures. 2. Ansys Integration Roadmap The $35B Ansys deal is a bet on simulation + chip synergy. Earnings need to show early strategic logic and timeline. 3. Backlog and Bookings Visibility Guidance stability hinges on visibility into design cycle demand and customer backlog conversion in H2. 4. Margin Durability With gross margins above 80%, any sign of erosion — especially during Ansys integration — could spook investors. 5. Geopolitical Exposure China exposure is a known wildcard. Investors need color on license restrictions and impact from U.S. export controls. Synopsys (NASDAQ: SNPS) will report fiscal Q2 2025 earnings with expectations running high following Cadence’s strong results and broader demand for AI chip design tools. The stock trades at $505.53, up 5.1% YTD and up more than 14% in the past month, supported by sector tailwinds and its pending $35 billion acquisition of Ansys. Street consensus expects $1.57 billion in revenue (+15% YoY) and non-GAAP EPS of $3.39. Synopsys guided to $1.59B–$1.62B in revenue, implying potential upside. As one of the most critical software providers to advanced semiconductor design, SNPS is expected to continue benefiting from the AI and custom silicon investment cycle. Key areas of focus include EDA growth, IP licensing strength, and updates on backlog visibility. Investors will also watch for commentary on export risk exposure (particularly China), the integration roadmap for Ansys, and whether recent leadership transitions could impact the long-term innovation pipeline. The post Earnings Live: High Expectations For Synopsys (SNPS) appeared first on 24/7 Wall St..» Mehr auf 247wallst.com