no_limit_pictures/E+ via Getty Images I gave Cadence Design Systems (NASDAQ:CDNS) a 'Hold' rating in my initiation article published in July 2023. I highlighted their leadership position in the semiconductor electronic design automation (EDA) software industry but expressed my concerns about the stock price valuation. They released their Q2 FY24 earnings on July 22nd after the market close, beating the market consensus and gaining momentum with its AI portfolio. As its stock price is overvalued, as per my c ...

Financial Data and Key Metrics Changes - Total revenue for Q2 2024 was $1.061 billion, with GAAP operating margin at 27.7% and non-GAAP operating margin at 40.1% [17] - GAAP EPS was $0.84, while non-GAAP EPS was $1.28 [17] - The company has a backlog of approximately $6 billion at the end of Q2 [17] - The updated revenue guidance for 2024 is projected to be between $4.6 billion and $4.66 billion, reflecting over 13% year-over-year growth [18] Business Line Data and Key Metrics Changes - The IP business experienced a 25% year-over-year growth in Q2 [11] - The system design and analysis business delivered 20% year-over-year revenue growth [13] - The AI-driven Cadence.AI portfolio saw orders more than tripling over the last year [8] Market Data and Key Metrics Changes - The company noted strong design activity driven by trends such as hyperscale computing, 5G, and autonomous driving, particularly in data center and automotive sectors [8] - The foundry ecosystem is expanding, leading to increased design activity and opportunities for Cadence's products [9] Company Strategy and Development Direction - Cadence is executing its intelligent system design strategy, focusing on extending leadership in core EDA while expanding into new system design analysis areas [8] - The company is embedding AI into its EDA, SDA, and digital biology solutions to enhance productivity and results [8] - The acquisition of BETA CAE is expected to strengthen the company's position in automotive and data center verticals [45] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing demand for solutions, with a healthy backlog and expectations for strong growth in the second half of 2024 [19] - The management highlighted that AI is broadening beyond data centers into automotive and consumer devices, which is expected to drive future growth [25] Other Important Information - The company repurchased $125 million of its shares in Q2 [17] - Cash balance at the end of the quarter was $1.059 billion, with a principal value of debt outstanding at $1.350 billion [17] Q&A Session Summary Question: Thoughts on semiconductor sales growth and Cadence's market share - Management noted that they are pleased with their performance and expect over 13% revenue growth, emphasizing their strong position in R&D spending [22][24] Question: China revenue expectations - Management indicated that they only need China to contribute 13% of overall revenue to meet guidance, with expectations for gradual improvement [26][28] Question: Confidence in Q4 growth - Management explained that the revenue curve is back-end loaded, with expectations for higher upfront revenue in Q4 due to hardware and IP [30][31] Question: Visibility on hardware demand - Management confirmed strong demand for hardware systems, with plans to build inventory to meet this demand [32][34] Question: Impact of BETA CAE acquisition - Management clarified that BETA CAE is expected to contribute $40 million in revenue and $0.12 dilution to non-GAAP EPS, with operational accretion anticipated next year [41][43] Question: Memory customers' adoption of advanced design products - Management acknowledged increased adoption of advanced digital design products by memory customers, driven by trends in HBM and 3D-IC [72][74]

Exhibit 99.02 CADENCE REPORTS SECOND QUARTER 2024 CADENCE DESIGN SYSTEMS, INC. CFO COMMENTARY | --- | --- | --- | |------------------------------------|-----------------------------------------------|------------------------------| | Key Takeaways | Q3 2024 Outlook | Q2 2024 KEYMETRICS | | • Annual revenue growth outlook is | • Revenue: $1.165 billion - $1.195 billion | | | now 13%, including $40 million | • GAAP operating margin: 27.7% - 29.3% | • Revenue: $1.061 billion | | from BETA CAE at the midpoint | ...

Cadence Design Systems, Inc (CDNS) is scheduled to release second-quarter 2024 results on Jul 22. The Zacks Consensus Estimate for second-quarter 2024 earnings has been unchanged in the past 60 days and is pegged at $1.23 per share. The consensus mark implies a marginal increase of 0.8% from the year-ago actual. The Zacks Consensus Estimate for second-quarter 2024 revenues is pegged at $1.05 billion, suggesting a 7.4% uptick from the year-ago actual.CDNS Estimate Trend Image Source: Zacks Investment Researc ...

The most recent trading session ended with Cadence Design Systems (CDNS) standing at $314.07, reflecting a -1.79% shift from the previouse trading day's closing. The stock fell short of the S&P 500, which registered a loss of 0.88% for the day. At the same time, the Dow added 0.08%, and the tech-heavy Nasdaq lost 1.95%.The maker of hardware and software products for validating chip designs's shares have seen an increase of 2.6% over the last month, not keeping up with the Computer and Technology sector's ga ...

In a stock market that’s somewhat lacking in volatility, value investors are sure to find other things to be anxious about. Indeed, momentum is growing behind a wide range of names, especially those in tech with artificial intelligence (AI) plans and products under development.For some value-conscious folks, the magnitude of momentum driven by an emerging technological trend may be enough to keep them glued to the bleachers. Momentum may be scary for value-conscious crowds, as volatility is for short-term t ...

Cadence Design Systems, Inc (CDNS) recently unveiled Cadence Janus Network-on-Chip (NoC) to boost electronic system connectivity. The solution will be available from July 2024.Janus NoC is designed to manage simultaneous high-speed communications within and between silicon components with minimal latency. This allows customers to achieve their power, performance and area (PPA) targets faster with relatively lower risk. It also frees up valuable engineering resources for system-on-chip (SoC) differentiation, ...

Cadence Design Systems (CDNS) closed the latest trading day at $311.53, indicating a +0.77% change from the previous session's end. The stock's performance was ahead of the S&P 500's daily gain of 0.09%. On the other hand, the Dow registered a loss of 0.1%, and the technology-centric Nasdaq increased by 0.16%.Prior to today's trading, shares of the maker of hardware and software products for validating chip designs had gained 5.05% over the past month. This has outpaced the Computer and Technology sector's ...

Last month, my AI-powered stock-picking system, MarketMaster AI, awarded Nvidia (NASDAQ:NVDA) a C-rated “hold” grade. Analysts were still raising their earnings estimates for the chipmaker, which was enough to offset the bearish pressure of high valuations. The result was a relatively muted outlook.However, my AI-powered stock-picking system downgraded Nvidia to a “D” this month, the equivalent of a “sell.” An unexpectedly strong first-quarter earnings season means shares of the company have now risen too f ...

In the latest trading session, Cadence Design Systems (CDNS) closed at $326.50, marking a +1.37% move from the previous day. The stock exceeded the S&P 500, which registered a gain of 0.25% for the day. Elsewhere, the Dow saw an upswing of 0.15%, while the tech-heavy Nasdaq appreciated by 0.03%.The maker of hardware and software products for validating chip designs's stock has climbed by 10.12% in the past month, exceeding the Computer and Technology sector's gain of 8.7% and the S&P 500's gain of 3.34%.The ...