Cadence Design Systems, Inc. CDNS recently joined forces with Rapidus Corporation to tackle some of the most pressing challenges in semiconductor design and manufacturing. The partnership aims to deliver artificial intelligence (AI)-driven reference design flows and a robust intellectual property (IP) portfolio to support Rapidus’ 2nm gate-all-around (GAA) process. The initiative also integrates the transformative potential of Rapidus’ backside power delivery network (BSPDN) technology.

With rising design challenges in the semiconductor industry driven by growing computational demands, GAA and BSPDN technologies are essential to meet stricter power, performance and area requirements. Cadence brings a robust suite of AI-driven digital and analog/mixed-signal design tools, ensuring designers can efficiently leverage the 2nm GAA BSPDN process. These tools, tailored to address the complexities of modern semiconductor design, include Cadence Cerebrus Intelligent Chip Explorer, Cadence JedAI Solution, Genus Synthesis Solution, Conformal, Joules RTL Power Solution, Innovus Implementation System, Tempus Timing Signoff Solution, Quantus Extraction Solution, Voltus IC Power Integrity Solution, Virtuoso Studio, Spectre X Simulator, Voltus-XFi Custom Power Integrity Solution, and Pegasus Verification System.

Apart from these tools, CDNS offers a comprehensive interface and memory IP portfolio that encompasses HBM4, 224G SerDes, and PCI Express 7.0 components. These components empower designers to build cutting-edge solutions to drive innovation and advancements in the semiconductor industry. 

The deal between Cadence and Rapidus is poised to accelerate the development of AI infrastructure, which relies heavily on advanced semiconductor technologies.  By combining Cadence’s expertise in AI-driven design tools and IP with Rapidus’ advancements in semiconductor manufacturing, the collaboration ensures its customers are well-equipped to meet future demands.

CDNS Thrives on Strategic Collaborations

Cadence remains focused on inking lucrative partnership deals across core EDA, IP and System Design and Analysis areas. Recently, it partnered with AST SpaceMobile to advance AST's goal of connecting smartphones to high-speed satellite Internet. ASTS leverages Cadence tools to develop a robust and widely accessible space-based cellular broadband network.

In September 2024, CDNS and TSMC teamed up to boost AI-driven chip designs and 3D-ICs, addressing the demand for advanced silicon. TSMC approved Cadence tools for its N3 and N2P technologies. In June 2024, Cadence collaborated with Samsung Foundry to fast-track the development of systems and semiconductors for high-demand applications, including AI, automotive, aerospace, hyperscale computing and mobile.

Growing partnerships and strong demand for advanced hardware systems, especially from AI, hyperscale and automotive sectors, are proving tailwinds for the company. Healthy growth trends are likely to reflect positively on its financial performance, propelling the stock.

In the last reported quarter, its top line jumped 18.8% year over year to $1.215 billion, beating the Zacks Consensus Estimate by 2.7%. Following a strong third quarter, management narrowed its 2024 revenue forecast to $4.61-$4.65 billion from the previous $4.6-$4.66 billion range. Non-GAAP earnings per share (EPS) are now expected to be between $5.87 and $5.93 compared with the earlier guidance of $5.77-$5.97.

CDNS’ Zacks Rank & Stock Price Performance

CDNS currently carries a Zacks Rank #3 (Hold). CDNS’ stock went up 2% in the last day’s trading on Nov. 11 and closed the session at $308.78. Shares of the company have gained 11.6% in the past year compared with the sub-industry's growth of 21.6%.

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Stocks to Consider

Some better-ranked stocks from the broader technology space are InterDigital, Inc. IDCC, Celestica Inc. CLS and Plexus Corp., Inc. PLXS. IDCC, CLS & PLXS presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

IDCC is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company engages in designing and developing a wide range of advanced technology solutions, which are used in digital cellular as well as wireless 3G, 4G and IEEE 802-related products and networks. It has a long-term growth expectation of 17.44%.

CLS provides competitive manufacturing technology and service solutions for printed circuit assembly and system assembly, as well as post-manufacturing support to many of the world's leading original equipment manufacturers. In the last reported quarter, it delivered an earnings surprise of 10.64%. 

Plexus is a leading provider of electronic contract manufacturing services to OEMs in a wide range of industries, including Healthcare/Life Sciences, Industrial and Aerospace/Defense market sectors. In the last reported quarter, PLXS delivered an earnings surprise of 20.92%.

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