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Top Stock Picks for Week of May 9, 2022

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Cadence Design Systems Inc. (CDNS - Free Report) offers products and tools that help customers to design electronic products. Cadence’s Q1 performance was driven by strength across all segments owing to healthy demand for the company’s diversified product portfolio. Frequent product launches are expected to help the company sustain top-line growth. In 2021, Cadence introduced 13 new products, including Cadence Helium Virtual and Hybrid Studio and Allegro X. The company is also gaining from higher investments in emerging trends like hyperscale computing, 5G, and autonomous driving along with strength in the semiconductor end-market. Shares of the company have outperformed the industry in the year-to-date period. The strong cash balance can help the company pursue strategic acquisitions and other investments in growth initiatives. Cadence is well-positioned for growth driven by its expanding product portfolio and strong demand for products from existing and emerging markets.  

ON Semiconductor, (ON - Free Report) is an original equipment manufacturer of a broad range of discrete and embedded semiconductor components.The companyis benefiting from broad-based strength across industrial, computing, consumer and automotive end-markets for both silicon carbide and insulated-gate bipolar transistor-based products. It continues to gain traction among electric vehicle manufacturers. The company gained from a strong demand environment, particularly for power and sensing products in automotive and industrial end markets. Its automotive segment is a strong growth driver for the company. Unit growth, share gains, attractive product offerings, rising content along with increasing demand for electric vehicles, contribute to revenues. The company has entered long-term supply agreements, which are expected to position it for long-term sustainable growth.  The company generates a significant percentage of revenues from each of the computing, consumer, industrial, communications and automotive markets. This mitigates the impact of seasonality typical of any of the markets, resulting in balanced growth through the year. Moreover, this diversity also helps the company to offset any weakness in a market by growth in others.     


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