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Investing.com - Berenberg raised its price target on Cadence Design Systems (NASDAQ:CDNS) to $400 from $330 while maintaining a Buy rating following the company’s second-quarter earnings report. The stock, currently trading near its 52-week high of $370.61, has delivered impressive returns with a 44.7% gain over the past year.
The semiconductor design software company reported its Q2 2025 results on July 29, delivering what Berenberg described as a "solid beat-and-raise" performance after several quarters without strong results exceeding expectations. According to InvestingPro data, Cadence maintains industry-leading gross margins of 85.86% and has achieved 19.55% revenue growth over the last twelve months.
Berenberg highlighted the upward revision to full-year guidance as "especially impressive" given temporary U.S. export restrictions that caused the loss of several weeks of sales to China, along with ongoing global macroeconomic and U.S.-China geopolitical uncertainties.
The investment firm upgraded its estimates to reflect both the Q2 outperformance and an improved near-term demand outlook, citing "AI-driven structural tailwinds" that reinforce their conviction in Cadence’s above-consensus growth potential.
While acknowledging that Cadence stock is approaching all-time-high valuation multiples, Berenberg continues to view it as a "premium quality asset deserving of such a premium."
In other recent news, Cadence Design Systems reported impressive second-quarter results, with revenue reaching $1.275 billion, surpassing the consensus estimate of $1.250 billion and marking a 20% year-over-year growth. The company also reported adjusted earnings per share of $1.65, exceeding the consensus estimate of $1.56 and representing a 29% increase from the previous year. Following these strong results, several analyst firms have raised their price targets for Cadence. Stifel increased its price target to $395 while maintaining a Buy rating, citing the company’s strong quarterly performance. KeyBanc raised its target to $405, highlighting Cadence’s best hardware quarter on record. Loop Capital adjusted its target to $390, acknowledging the company’s ability to exceed expectations despite facing challenges from a U.S. export ban. Needham also increased its target to $390, noting the positive earnings report and guidance for the third quarter and full year 2025. Meanwhile, Rosenblatt raised its price target to $320, maintaining a Neutral rating, and noted that Cadence’s revenue performance exceeded its forecast.
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