Cadence Stock Can Be an AI Winner. The Earnings Prove It. -- Barrons.com

By Nate Wolf

Cadence Design Systems stock rose Monday after the chip-design company reported better-than-expected earnings and reaffirmed its positioning as an artificial-intelligence beneficiary.

Cadence reported adjusted earnings of $2.11 a share in the second quarter, up from $1.65 a year ago and above analysts' consensus estimate of $2.05, according to FactSet. Revenue grew 24% year over year to $1.58 billion, in line with Wall Street's forecast.

Shares jumped 3.9% in after-hours trading. The stock has climbed 8.3% this year, almost exactly in line with the S&P 500.

Chip makers like Nvidia and Taiwan Semiconductor Manufacturing use Cadence's software as part of their design process, and semiconductor demand has been one of the stories of the market in 2026. Last month, the company unveiled an autonomous virtual engineer for chip design, further incorporating AI into the design process itself.

But Cadence remains a software company -- a label that has acted like a black mark for many stocks. Shareholders will hope that yet another earnings beat firmly establishes the company as a chip-linked AI winner.

Cadence lifted its full-year guidance for adjusted earnings per share to between $8.05 and $8.15, up from a previous range of $7.85 to $7.95. The company expects revenue of $6.3 billion at the midpoint, up from $6.18 billion.

Write to Nate Wolf at nate.wolf@barrons.com

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July 27, 2026 16:27 ET (20:27 GMT)