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FINWIRES

Cadence Design Systems Faces 'Mounting' Valuation Pressure, Oppenheimer Says

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-- Cadence Design Systems (CDNS) faces "mounting" valuation pressure as it should be recording faster growth if it is an "AI play," Oppenheimer said in a Tuesday note.

The analysts said the long-term AI debate around the company's software remains unresolved.

Oppenheimer said that based on the company's Q1 results, "positive" AI inflection remains elusive. The company's 2026 organic growth guidance of 13.6% is "respectable" but well below the chip industry growth of 64%.

Analysts lowered their 2026 earnings estimate for Cadence to $4.43 from $5.06. Analysts polled by FactSet expect $4.60.

According to the note, catalysts for the Cadence stock include chips-to-software sector rotation, AI growth fluctuations, and changes to trade barriers.

Oppenheimer has a perform rating and a $275 price target on the stock.

Price: $325.73, Change: $-10.96, Percent Change: -3.25%

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