Jim Cramer Discusses Cadence Design Systems (CDNS)

We recently published 10 Stocks Jim Cramer Talked About.  Cadence Design Systems, Inc. (NASDAQ:CDNS) is one of the stocks Jim Cramer talked about.

Cadence Design Systems, Inc. (NASDAQ:CDNS) is a software company that caters to the needs of the semiconductor industry by enabling chip designers to create and test their products. The shares are up by 12% over the past year and are down by 8.6% year-to-date. Bank of America discussed Cadence Design Systems, Inc. (NASDAQ:CDNS) on February 10th. It reiterated a Buy rating and a $400 share price target. BofA’s coverage came as the software company announced that it had launched a virtual AI agent to aid customers in the process of designing computer chips. Cadence Design Systems, Inc. (NASDAQ:CDNS) claimed that the upgrade was the first agentic software that caters to chip designers. The firm’s products are used by some of the world’s largest chip designers, such as NVIDIA. Cadence Design Systems, Inc. (NASDAQ:CDNS)’s earnings report saw the firm post $1.44 billion in revenue and $1.99 in earnings per share to beat analyst estimates of $1.91 and $1.42 billion. Cramer was impressed by the results:

“You have, Anirudh coming up, Anirudh Devgan. Now he will be able to answer more questions than anyone. Cause he does electronic design automation and is a great partner of NVIDIA. And he will tell you, this stock has not been good performer this year, until this morning down, he reported an absolute blowout quarter, and showed you, without a doubt, this industry, which is the complex part, you have the design, you send it over to Taiwan Semi after you get the packaging”

Rothschild & Co LongRun Equity also discussed Cadence Design Systems, Inc. (NASDAQ:CDNS) in its third quarter 2025 investor letter:

“In this section, we take a closer look at one of our recent investments, Cadence Design Systems, Inc. (NASDAQ:CDNS), a company that provides the essential tools to design the chips powering today’s most advanced technologies.

Cadence Design Systems is a new holding in the LongRun Equity fund. The company perfectly fits our strategy of owning durable, high-quality compounders in structurally growing industries. Though not a household name, Cadence’s software and hardware tools are mission critical for designing the semiconductor chips that power smartphones, computers, autonomous cars, Artificial Intelligence (AI) systems and more. In the following paragraphs, we’ll break down Cadence’s business model and investment rationale in clear and straightforward terms.

When people think about AI, names like Nvidia, Google, OpenAI, or Microsoft usually come to mind. But how do these companies design the advanced chips that power AI? The answer leads to Cadence and Synopsys. These firms provide the essential software that makes designing cutting-edge chips possible – without it, modern AI simply wouldn’t exist…” (Click here to read the full text)

While we acknowledge the potential of CDNS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.