智通财经网·2025-11-25 07:40Core Viewpoint - Citi Group has initiated coverage on two leading EDA giants, Synopsys (SNPS.US) and Cadence Design Systems (CDNS.US), with a "Buy" rating, predicting they will be key players in the upcoming AI investment wave [1][7] Group 1: Market Performance and Ratings - Both Synopsys and Cadence have underperformed in the past six months, with Synopsys down approximately 22% and Cadence down 5%, lagging behind the Philadelphia Semiconductor Index and the S&P 500 [2] - Citi has set a 12-month target price of $580 for Synopsys and $385 for Cadence, reflecting optimism about their recovery [7] - The EDA software market is dominated by Synopsys and Cadence, which together hold about 70% market share, with expected sustainable revenue growth of 15% to 20% [7][8] Group 2: AI and EDA Software Demand - The demand for EDA software is increasing due to the growing need for complex AI chip designs, driven by major tech companies like NVIDIA, AMD, and cloud giants [3][4] - EDA software is essential for chip design, and its role is becoming more critical as AI infrastructure demands exponential growth in computing power [3][4] - Both companies have integrated AI tools into their EDA software ecosystems, enhancing design efficiency and productivity [5][4] Group 3: Financial Resilience and Future Outlook - EDA software has shown strong fundamental resilience, consistently outperforming the semiconductor industry during downturns [8] - The share of EDA in overall chip industry R&D budgets is expected to rise from 13%-15% as AI tools enhance productivity [8] - Citi analysts favor Synopsys over Cadence due to its current valuation discount and potential for margin improvement [8]