Cadence Design Systems (NASDAQ:CDNS) Shares Gap Up After Earnings Beat

Cadence Design Systems, Inc. (NASDAQ:CDNS)’s share price gapped up before the market opened on Wednesday after the company announced better than expected quarterly earnings. The stock had previously closed at $283.46, but opened at $302.96. Cadence Design Systems shares last traded at $309.7170, with a volume of 1,871,822 shares.

The software maker reported $1.99 earnings per share for the quarter, beating analysts’ consensus estimates of $1.91 by $0.08. The company had revenue of $1.44 billion during the quarter, compared to analysts’ expectations of $1.42 billion. Cadence Design Systems had a return on equity of 29.34% and a net margin of 20.93%.The firm’s revenue for the quarter was up 6.2% on a year-over-year basis. During the same quarter in the previous year, the business earned $1.88 earnings per share. Cadence Design Systems has set its Q1 2026 guidance at 1.890-1.950 EPS and its FY 2026 guidance at 8.050-8.150 EPS.

Key Stories Impacting Cadence Design Systems

Here are the key news stories impacting Cadence Design Systems this week:

• Positive Sentiment: Q4 beat and 2026 guidance: Cadence reported Q4 revenue and EPS above estimates and issued FY‑2026 guidance that implies healthy growth and margin expansion; the print and outlook are the primary bullish catalyst behind the initial rally after earnings. CNBC: Cadence shares pop on earnings beat, custom chip optimism
• Positive Sentiment: AI product traction: Cadence highlighted its ChipStack AI Super Agent and AI-driven tools (Cerebrus) that management says can materially speed chip design and improve power/performance/area — strengthening Cadence’s growth narrative and valuation premium. Yahoo Finance: Cadence ChipStack AI Super Agent Launch
• Positive Sentiment: Analyst bullishness and price-target support: Several firms (Bank of America, Needham, others) reaffirmed buy ratings or raised targets after the print, supporting upside narratives for investors focused on AI and semiconductor design exposure. InsiderMonkey: Bank of America remains bullish
• Neutral Sentiment: Backlog and visibility: Management flagged a record backlog (~$7.8B) and that a large portion of 2026 revenue is already visible — positive for revenue certainty but implies some growth is already priced in. MarketBeat: CDNS post-earnings note
• Negative Sentiment: Heavy put and unusual options activity: Reported spikes in put buying and large volumes of put options suggest some traders are betting on a pullback or hedging exposure, which can amplify intraday selling pressure. American Banking News: Traders buy put options
• Negative Sentiment: Mixed analyst moves and target trims: A few firms trimmed price targets or maintained neutral ratings (Piper Sandler cut its target; Rosenblatt and others showed mixed messages), adding uncertainty about near-term upside and prompting profit-taking. Benzinga: Analyst revisions after Q4
• Neutral Sentiment: Short-interest data reported is unreliable/zero in recent feed (likely a data issue) and should not be relied on for trading signals. (No meaningful linked source.)

Analyst Upgrades and Downgrades

A number of brokerages have recently commented on CDNS. Oppenheimer raised shares of Cadence Design Systems from an “underperform” rating to a “market perform” rating and set a $275.00 target price for the company in a report on Monday, December 1st. Citigroup assumed coverage on Cadence Design Systems in a research report on Monday, November 24th. They issued a “buy” rating and a $385.00 price target on the stock. JPMorgan Chase & Co. increased their price objective on Cadence Design Systems from $390.00 to $405.00 and gave the stock an “overweight” rating in a research report on Tuesday, October 28th. KeyCorp reissued an “overweight” rating and issued a $405.00 target price on shares of Cadence Design Systems in a report on Tuesday, October 28th. Finally, Rosenblatt Securities upgraded Cadence Design Systems from a “neutral” rating to a “buy” rating and upped their price target for the stock from $335.00 to $360.00 in a research note on Wednesday. Fifteen equities research analysts have rated the stock with a Buy rating and three have given a Hold rating to the company’s stock. According to MarketBeat, the stock has an average rating of “Moderate Buy” and an average price target of $376.50.

Insider Activity at Cadence Design Systems

In related news, CEO Anirudh Devgan sold 20,000 shares of the firm’s stock in a transaction that occurred on Friday, December 5th. The stock was sold at an average price of $340.00, for a total value of $6,800,000.00. Following the completion of the transaction, the chief executive officer directly owned 195,844 shares of the company’s stock, valued at $66,586,960. This trade represents a 9.27% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, Director Ita M. Brennan sold 180 shares of Cadence Design Systems stock in a transaction on Wednesday, December 10th. The stock was sold at an average price of $337.48, for a total value of $60,746.40. Following the transaction, the director directly owned 7,650 shares of the company’s stock, valued at approximately $2,581,722. This represents a 2.30% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. In the last 90 days, insiders sold 56,475 shares of company stock worth $18,505,486. 1.99% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On Cadence Design Systems

A number of large investors have recently added to or reduced their stakes in the business. T. Rowe Price Investment Management Inc. raised its position in Cadence Design Systems by 8.0% during the fourth quarter. T. Rowe Price Investment Management Inc. now owns 10,511 shares of the software maker’s stock worth $3,286,000 after acquiring an additional 777 shares during the last quarter. Compound Planning Inc. increased its stake in shares of Cadence Design Systems by 1.7% during the 4th quarter. Compound Planning Inc. now owns 3,201 shares of the software maker’s stock worth $1,001,000 after purchasing an additional 55 shares in the last quarter. Corient Private Wealth LLC raised its position in shares of Cadence Design Systems by 22.1% during the 4th quarter. Corient Private Wealth LLC now owns 293,243 shares of the software maker’s stock worth $91,662,000 after purchasing an additional 53,168 shares during the last quarter. Mercer Global Advisors Inc. ADV lifted its stake in Cadence Design Systems by 19.1% in the 4th quarter. Mercer Global Advisors Inc. ADV now owns 43,300 shares of the software maker’s stock valued at $13,535,000 after buying an additional 6,931 shares in the last quarter. Finally, Raymond James Financial Inc. grew its holdings in Cadence Design Systems by 3.0% during the 4th quarter. Raymond James Financial Inc. now owns 711,292 shares of the software maker’s stock valued at $222,350,000 after buying an additional 20,475 shares during the last quarter. 84.85% of the stock is owned by institutional investors and hedge funds.

Cadence Design Systems Trading Down 2.8%

The company has a debt-to-equity ratio of 0.45, a quick ratio of 2.84 and a current ratio of 2.86. The business has a fifty day simple moving average of $308.44 and a 200 day simple moving average of $328.50. The stock has a market cap of $80.73 billion, a price-to-earnings ratio of 73.05, a PEG ratio of 3.39 and a beta of 1.01.

About Cadence Design Systems

Cadence Design Systems, Inc (NASDAQ: CDNS) is a global provider of electronic design automation (EDA) software, hardware and intellectual property used to design and verify advanced semiconductor chips, systems-on-chip (SoCs), printed circuit boards (PCBs) and packaging. Headquartered in San Jose, California and founded in 1988, Cadence serves semiconductor companies, original equipment manufacturers and system designers across the globe, helping customers accelerate design cycles and manage the complexity of modern integrated systems.

The company’s offerings span software tools for digital, custom/analog and mixed-signal design, verification and signoff, as well as solutions for system-level modeling, thermal and signal integrity analysis, and PCB and package design.