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Investing.com - Needham raised its price target on Cadence Design Systems (NASDAQ:CDNS) to $390 from $325 while maintaining a Buy rating on the stock. The new target represents significant upside from the current trading price of $333.76, with the stock already trading near its 52-week high of $335.16. According to InvestingPro data, Cadence maintains impressive gross margins of 85.86% and currently commands a market capitalization of $91.13 billion.
The research firm’s decision follows Cadence’s strong second-quarter 2025 earnings report and guidance for both the third quarter and full year 2025 that exceeded Street expectations.
Cadence increased its full-year growth target by one percentage point and now forecasts 13% top-line growth for 2025.
Hardware performance was highlighted as the standout aspect of the quarter, with Needham noting that while specific hardware revenue figures weren’t explicitly provided, they could be inferred from "all-time-high upfront revenue in both dollar and percentage terms."
Needham expects the hardware cycle to "run at full strength" through the second half of 2025 and into 2026, supporting its more bullish outlook on the stock.
In other recent news, Cadence Design Systems reported strong second-quarter 2025 financial results, with revenue reaching $1.275 billion, marking a 20% year-over-year growth. This surpassed both Rosenblatt’s forecast of $1.215 billion and the consensus estimate of $1.250 billion. The company also reported earnings per share of $1.65, exceeding the forecasted $1.57, and raised its full-year revenue and EPS guidance. KeyBanc highlighted this as Cadence’s best hardware quarter on record, noting a revenue beat of $21 million, or 2%, above expectations.
Rosenblatt responded by raising its price target for Cadence to $320 while maintaining a Neutral rating. KeyBanc also increased its price target to $405, maintaining an Overweight rating. However, Piper Sandler downgraded Cadence from Overweight to Neutral due to valuation concerns, despite raising its price target to $355. These recent developments reflect a mixed analyst outlook, with some firms expressing optimism over the company’s performance and others cautious about its valuation.
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