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Here's How Much a $1000 Investment in Cadence Design Systems Made 10 Years Ago Would Be Worth Today
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For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you'd invested in Cadence Design Systems (CDNS - Free Report) ten years ago? It may not have been easy to hold on to CDNS for all that time, but if you did, how much would your investment be worth today?
Cadence Design Systems' Business In-Depth
With that in mind, let's take a look at Cadence Design Systems' main business drivers.
Based in San Jose, CA, Cadence Design Systems Inc is a leader in electronic system design space. The company’s Intelligent System Design strategy aids users to transform design concepts into reality by offering computational software, hardware and IP.
Cadence’s core electronic design automation (EDA) software and services enable engineers to develop different types of ICs. Its design IP’s are directly integrated into the ICs.
Cadence reported revenues of $3.562 billion in 2022.
The major product lines are as follows:
Functional verification products (26% of total 2022 revenues) comprise four primary verification engines – JasperGold formal verification platform, Xcelium parallel simulation platform, Palladium Enterprise Emulation Platform and Protium FPGA-Based Prototyping Platform.
Digital IC Design and Signoff (28%) offerings include Genus Synthesis solution, Joules RTL power and Modus software solution. Innovus implementation system is the company’s physical implementation offering. The company’s signoff offerings include the Tempus Timing Signoff Solution, Voltus Power Integrity Solution, Quantus Extraction Solution and Pegasus Physical Verification System.
Custom IC Design and Simulation (22%) includes the Virtuoso custom design platform, Virtuoso Advanced Node, and the Virtuoso RF Solution. The Spectre Simulation Platform offers large-scale verification simulation.
Systems Design & Analysis segment (12%) offers Allegro system interconnect design platform, Fidelity CFD Software and OrCAD solution. The Allegro System Design Platform aids users in carrying out PCB authoring and implementation, PCB library design management and collaboration, signal and power integrity analysis, IC package and system-in-package design.
Under the IP segment (12%), Cadence offers Tensilica digital signal processors (DSPs), vertically targeted subsystems for AI, audio/voice, baseband and vision/imaging applications, controllers and physical interfaces (PHYs) for standard protocols and analog IP.
In 2022, the company derived 44.3% of revenues from United States, while the balance 55.7% came from its international operations.
Bottom Line
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Cadence Design Systems ten years ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in January 2014 would be worth $20,531.78, or a 1,953.18% gain, as of January 29, 2024. Investors should keep in mind that this return excludes dividends but includes price appreciation.
The S&P 500 rose 173.19% and the price of gold increased 52.70% over the same time frame in comparison.
Looking ahead, analysts are expecting more upside for CDNS.
Cadence’s performance is being driven by strength across all segments due to higher customer demand. Accelerated design activity owing to transformative generational trends such as generative AI, hyperscale computing, 5G and autonomous driving is likely to boost the top line going ahead. Management noted that comprehensive JedAI Generative AI platform is witnessing continued momentum, with sales of its GenAI solutions having nearly tripled in the last year. Frequent new product launches and strategic collaborations bode well. Cadence has increased revenue guidance for 2023 to $4.06-$4.1 billion compared with the previous view of $4.05-$4.09 billion. We expect the metric to be $4.08 billion. However, higher research & development costs, stiff competition and weakness prevailing over global macroeconomic conditions remain concerning.
The stock is up 6.74% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 1 higher, for fiscal 2023. The consensus estimate has moved up as well.
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Here's How Much a $1000 Investment in Cadence Design Systems Made 10 Years Ago Would Be Worth Today
For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you'd invested in Cadence Design Systems (CDNS - Free Report) ten years ago? It may not have been easy to hold on to CDNS for all that time, but if you did, how much would your investment be worth today?
Cadence Design Systems' Business In-Depth
With that in mind, let's take a look at Cadence Design Systems' main business drivers.
Based in San Jose, CA, Cadence Design Systems Inc is a leader in electronic system design space. The company’s Intelligent System Design strategy aids users to transform design concepts into reality by offering computational software, hardware and IP.
Cadence’s core electronic design automation (EDA) software and services enable engineers to develop different types of ICs. Its design IP’s are directly integrated into the ICs.
Cadence reported revenues of $3.562 billion in 2022.
The major product lines are as follows:
Functional verification products (26% of total 2022 revenues) comprise four primary verification engines – JasperGold formal verification platform, Xcelium parallel simulation platform, Palladium Enterprise Emulation Platform and Protium FPGA-Based Prototyping Platform.
Digital IC Design and Signoff (28%) offerings include Genus Synthesis solution, Joules RTL power and Modus software solution. Innovus implementation system is the company’s physical implementation offering. The company’s signoff offerings include the Tempus Timing Signoff Solution, Voltus Power Integrity Solution, Quantus Extraction Solution and Pegasus Physical Verification System.
Custom IC Design and Simulation (22%) includes the Virtuoso custom design platform, Virtuoso Advanced Node, and the Virtuoso RF Solution. The Spectre Simulation Platform offers large-scale verification simulation.
Systems Design & Analysis segment (12%) offers Allegro system interconnect design platform, Fidelity CFD Software and OrCAD solution. The Allegro System Design Platform aids users in carrying out PCB authoring and implementation, PCB library design management and collaboration, signal and power integrity analysis, IC package and system-in-package design.
Under the IP segment (12%), Cadence offers Tensilica digital signal processors (DSPs), vertically targeted subsystems for AI, audio/voice, baseband and vision/imaging applications, controllers and physical interfaces (PHYs) for standard protocols and analog IP.
In 2022, the company derived 44.3% of revenues from United States, while the balance 55.7% came from its international operations.
Bottom Line
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Cadence Design Systems ten years ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in January 2014 would be worth $20,531.78, or a 1,953.18% gain, as of January 29, 2024. Investors should keep in mind that this return excludes dividends but includes price appreciation.
The S&P 500 rose 173.19% and the price of gold increased 52.70% over the same time frame in comparison.
Looking ahead, analysts are expecting more upside for CDNS.
Cadence’s performance is being driven by strength across all segments due to higher customer demand. Accelerated design activity owing to transformative generational trends such as generative AI, hyperscale computing, 5G and autonomous driving is likely to boost the top line going ahead. Management noted that comprehensive JedAI Generative AI platform is witnessing continued momentum, with sales of its GenAI solutions having nearly tripled in the last year. Frequent new product launches and strategic collaborations bode well. Cadence has increased revenue guidance for 2023 to $4.06-$4.1 billion compared with the previous view of $4.05-$4.09 billion. We expect the metric to be $4.08 billion. However, higher research & development costs, stiff competition and weakness prevailing over global macroeconomic conditions remain concerning.
The stock is up 6.74% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 1 higher, for fiscal 2023. The consensus estimate has moved up as well.