Cadence Design Systems (CDNS) stock pushed meaningfully higher on Feb. 18, after the electronic design automation (EDA) software giant silenced artificial intelligence (AI) disruption fears with a strong Q4 release. As investors cheered its better-than-expected 2026 earnings guidance, the company’s share price exploded up to challenge its 50-day moving average (MA) at the $311 level.
A decisive break above this price may accelerate bullish momentum in the near term. Despite post-earnings surge, Cadence stock remains down about 18% versus its 52-week high.
Is It Worth Buying Cadence Stock Into Post-Earnings Strength?
Long-term investors should also consider loading up on CDNS stock because the company ended its Q4 with a record $7.8 billion backlog, offering significant visibility into 2026.
These contractual obligations dismantle artificial intelligence disruption fears, showcasing how AI is actually a “force multiplier” for Cadence Design Systems, not a threat.
Its recent launch of a groundbreaking agentic artificial intelligence solution (ChipStack) highlights a shift where AI super agents autonomously run its tools to accelerate chip design.
This is driving a 25% increase in intellectual property (IP) revenue and record hardware demand, reinforcing that as chips become more complex, the industry’s dependence on CDNS’ software only intensifies.
JPMorgan Sees Significant Further Upside in CDNS Shares
In a post-earnings research note, JPMorgan senior analyst Harlan Sur also agreed that AI disruption fears are rather overblown — at least in the case of Cadence Design Systems.
“Chip design software is highly complex and not easily replicated,” he told clients on Wednesday.
If anything, AI will help CDNS “unlock better automation capabilities and drive improved monetization,” helping it surpass $400 by the end of 2026, the analyst added.
Cadence shares have been in a sharp uptrend this month, but its relative strength index (14-day) remains at 54 only, indicating they’re not out of juice just yet.
Cadence Remains a Buy-Rated Stock Among Wall Street Firms
Other Wall Street analysts agree with Sur’s constructive view on Cadence Design Systems as well.
According to Barchart, the consensus rating on CDNS shares sits at “Strong Buy” currently, with the mean target of about $383 indicating potential upside of another 22% from here.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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