Should I Buy CDNS? CDNS 2026 Analysis

Should You Buy Cadence Design Systems Inc (CDNS) Today? Analysis, Price Targets, and 2026 Outlook.

Conclusion

Hold

Latest Price

283.520

1 Day change

4.95%

52 Week Range

376.440

Analysis Updated At

2026/02/04

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Not a good buy right now for an impatient buyer: the chart trend is decisively bearish (downtrend + momentum still worsening), which raises the odds of further downside before any durable rebound.
While RSI is extremely oversold and could spark a short-term bounce, there is no proprietary buy signal (AI Stock Picker/SwingMax) confirming a high-probability entry today.
Fundamentally strong (double-digit revenue growth and strong EPS growth), but the current tape/price action suggests waiting for stabilization (e.g., reclaiming S1 ~274 and improving MACD) before treating it as a buy.

Technical Analysis

Trend/Momentum: Bearish. Moving averages are stacked bearishly (SMA_200 > SMA_20 > SMA_5), indicating a sustained downtrend.
MACD: Histogram -4.407 and negatively expanding -> downside momentum is still building rather than bottoming.
RSI (6): 12.531 -> extremely oversold; a reflex bounce is possible, but oversold alone is not a buy signal when MACD is still deteriorating.
Key levels: Price ~267 is below S1 (274.356) and above S2 (259.621). A break below ~259.6 would likely extend the selloff; reclaiming ~274 is the first sign of stabilization. Pivot resistance is far above at ~298.2.

Intellectia Proprietary Trading Signals

AI Stock Picker: no signal on given stock today.
SwingMax: No signal on given stock recently.

Options Data

Neutral

Open Interest Put-Call Ratio

Bullish

Option Volume Put-Call Ratio

Sentiment read: Mixed. Open-interest put/call at 1.02 is slightly defensive/neutral-bearish, but volume put/call at 0.66 shows more call trading activity today (short-term bullish tilt).
Volatility: 30D IV 40.88 vs historical vol 29.2; IV percentile 77.11 -> options are relatively expensive, consistent with elevated uncertainty/fear.
Activity: Today’s option volume ~107% of 30D average (modestly elevated), not a major “capitulation” signal by itself.

Technical Summary

Sell

Buy

Positive Catalysts

- Fundamentals support: 2025/Q3 showed solid growth (Revenue +10.15% YoY, EPS +20.69% YoY), reinforcing the long-term AI/EDA demand narrative.
- Hedge fund flow: “Hedge Funds are Buying” with buying amount up ~225% last quarter (supportive medium-term positioning).
- Upcoming event: Earnings on 2026-02-17 (after hours) can act as a catalyst if guidance confirms sustained AI-driven demand.
- Street upside case: Citi initiated Buy with a $385 target, framing EDA as a backbone beneficiary of the next AI phase.

Neutral/Negative Catalysts

- Price action is the main risk: downtrend structure remains intact and momentum is still worsening (MACD expanding negative), increasing odds of more near-term downside.
- No insider support signal: insiders are neutral recently.
- Options imply uncertainty: high IV percentile suggests the market is pricing meaningful movement/risk.
- News flow in semis/foundry (Intel-focused headlines) is mixed/uncertain and can spill over into broader semiconductor tooling/software sentiment even if not CDNS-specific.
- No recent congress trading data available (no supportive “influential buyer” signal).

Financial Performance

Latest quarter provided: 2025/Q3.
Revenue: $1.338B, +10.15% YoY (steady double-digit growth).
Net income: $287.1M, +20.58% YoY (profit growth outpacing revenue).
EPS: $1.05, +20.69% YoY (strong earnings leverage).
Gross margin: 85.63%, -0.23% YoY (minor compression, still very high margin profile).

Growth

Profitability

Efficiency

Analyst Ratings and Price Target Trends

Recent changes are mixed:
- 2026-01-05: Goldman Sachs removed CDNS from its US Conviction List (sentiment negative/less bullish emphasis).
- 2025-11-24: Citi initiated at Buy with a $385 price target (strongly positive long-term thesis tied to AI/EDA).
Wall Street pros/cons view:
- Pros: secular AI/EDA demand tailwind, potential for durable double-digit growth and strong margins (per Citi’s framing).
- Cons: near-term multiple/positioning risk signaled by removal from a conviction list and the current technical breakdown; the market is not rewarding the story right now.

12 Analyst Rating

Wall Street analysts forecast CDNS stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for CDNS is 376.64 USD with a low forecast of 275 USD and a high forecast of 418 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.

9 Buy

3 Hold

0 Sell

Strong Buy

Current: 270.140

Low

275

Averages

376.64

High

418

Current: 270.140

Low

275

Averages

376.64

High

418

Goldman Sachs

downgrade

AI Analysis

2026-01-05

Reason

Goldman Sachs

Price Target

AI Analysis

2026-01-05

downgrade

Reason

Goldman Sachs analysts removed Cadence Design from the firm's US Conviction List as part of its monthly update.

Citi

NULL

Buy

initiated

$385

2025-11-24

Reason

Citi

Price Target

$385

2025-11-24

initiated

NULL

Buy

Reason

Citi initiated coverage of Cadence Design with a Buy rating and $385 price target. The firm believes the electronic design automation market is "emerging as the backbone" of the next growth phase of artificial intelligence. The sector is brining intelligence from software to the physical world, which should drive double-digit revenue growth with 40% operating margins, the analyst tells investors in a research note. Citi sees a favorable fundamental setup for Cadence.

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CDNS Should I Buy

CDNS Should I Buy

Should You Buy Cadence Design Systems Inc (CDNS) Today? Analysis, Price Targets, and 2026 Outlook.

Technical Analysis

Options Data

Technical Summary

Positive Catalysts

Neutral/Negative Catalysts

Financial Performance

Growth

Profitability

Efficiency

Analyst Ratings and Price Target Trends

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