Cadence to provide engineering tools for Europe’s industrial AI cloud

PARIS - Cadence Design Systems, Inc. (NASDAQ:CDNS), a technology powerhouse with impressive gross profit margins of 85.86% and robust revenue growth of 19.55% in the last twelve months, announced Wednesday it will offer its engineering design solutions on what it describes as the world’s first industrial AI cloud, developed in collaboration with NVIDIA. InvestingPro analysis reveals 14 additional key insights about Cadence’s market position and growth potential.

The cloud platform will feature Cadence’s computational fluid dynamics, circuit simulation, and power integrity tools optimized for NVIDIA’s Grace Blackwell computing architecture, according to a company press release.

The industrial AI cloud will be built using 10,000 NVIDIA Blackwell GPUs in DGX B200 systems and RTX Pro Servers. Cadence claims its solvers, when accelerated by NVIDIA Blackwell systems, can achieve up to 80 times faster performance.

French aviation company Ascendance is already using Cadence Fidelity computational fluid dynamics software with NVIDIA computing to design aircraft, reportedly reducing simulation runtimes by 20 times.

"By making our solutions available on the NVIDIA industrial AI cloud, we’re empowering Europe’s leaders to design intelligent systems faster," said Michael Jackson, corporate vice president at Cadence.

The cloud infrastructure will incorporate NVIDIA’s Omniverse Blueprint for AI factory design alongside Cadence’s Reality Digital Twin Platform to simulate data center operations in a virtual environment.

Cadence also announced its new Millennium M2000 Supercomputer, which combines the company’s design software with NVIDIA’s Blackwell platform to accelerate silicon, system, and drug design processes.

The announcement was made at NVIDIA’s GTC event in Paris. The industrial AI cloud will primarily serve European industrial sectors including automotive, energy infrastructure, and manufacturing. Trading near its 52-week high of $328.99, Cadence appears overvalued according to InvestingPro’s Fair Value analysis, though its strong financial metrics and market position suggest continued growth potential. Discover comprehensive insights about Cadence and 1,400+ other stocks through InvestingPro’s detailed Research Reports.

In other recent news, Cadence Design Systems reported first-quarter revenues of approximately $1.242 billion, marking a 23% increase compared to the previous year. This revenue slightly surpassed the consensus estimate of $1.24 billion, driven by enhancements in hardware offerings and strong intellectual property sales. Meanwhile, Mizuho Securities raised its price target for Cadence to $325, maintaining an Outperform rating, following the company’s earnings report that exceeded expectations in margins and earnings per share. Rosenblatt Securities also adjusted its price target to $300, maintaining a Neutral stance, citing Cadence’s robust performance and strategic moves like acquiring Arm’s Artisan foundation IP business.

Cadence has also launched the Tensilica NeuroEdge 130 AI Co-Processor to improve neural processing unit performance, offering significant area savings and power reductions. The processor is designed to support various applications, including automotive and consumer electronics, and is backed by the Cadence NeuroWeave Software Development Kit. Additionally, Cadence announced the Millennium M2000 Supercomputer, integrated with NVIDIA technology, which promises to enhance simulation speeds for electronic design automation and other fields. This supercomputer aims to transform semiconductor design and drug discovery processes.

Furthermore, Cadence is navigating new export controls to China, requiring licenses for certain transactions involving Chinese military end users. The company is seeking clarification from the Bureau of Industry and Security on these regulations to assess their potential impact on business operations. Despite these regulatory challenges, Cadence continues to experience strong global business momentum and customer design activity.

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