Cadence Design Systems Inc. (CDNS): Guidance raise reflects acceleration across franchise; we see agentic AI tailwinds ahead

Research evidence excerpt

Cadence Design Systems Inc. (CDNS): Guidance raise reflects acceleration across franchise; we see agentic AI tailwinds ahead

Equity Research

27 July 2026 | 8:21PM EDT

Cadence Design Systems Inc. (CDNS): Guidance raise reflects

acceleration across franchise; we see agentic AI tailwinds ahead

Key stock takeaways: We expect the stock to move higher following a solid print and James Schneider, Ph.D.

+1(212)357-2929 |

increased 2026 guidance. We believe investors were positioned relatively cautiously jim.schneider@gs.com

Goldman Sachs & Co. LLC

around the quarter given the defense nature of Cadence’s business, as well as

Luya You

concerns around potential disruption risk from open-source AI models, among other +1(212)902-5297 | luya.you@gs.com

factors. We believe management successfully highlighted additional ways in which Goldman Sachs & Co. LLC

Anmol Makkarthe company can monetize its AI offerings, with agentic tools expected to drive +1(212)357-1366 |

accelerating usage of base EDA tools (with ~20% Y/Y organic recurring revenue anmol.makkar@gs.comGoldman Sachs & Co. LLC

growth in the quarter) along with accelerated consumption spending. We remain Khalil Fenina

Buy rated on Cadence as we continue to view the company as one of the +1(212)357-6392 | khalil.fenina@gs.com

highest-quality compounding businesses in our coverage, with leverage to multiple Goldman Sachs & Co. LLC

industry themes including a growing base of customers, an accelerating IP business,

and the potential for significant pricing accretion from the provision of agentic AI

features in its core EDA business over time.

Read-through to our coverage: We expect a modestly positive reaction for peer

SNPS given its similar customer and end market exposure.