April 27 - Cadence Design Systems said on Monday that it has increased its full-year revenue forecast, pointing to sustained, heavy spending on specialized artificial intelligence processors as the primary driver of demand for its chip-design software and hardware.
The company indicated that fiscal 2026 revenue is now expected to fall in the range of $6.13 billion to $6.23 billion, up from its prior outlook of $5.9 billion to $6.0 billion. At the same time, Cadence trimmed its annual adjusted earnings-per-share forecast to a range of $7.85 to $7.95, below the earlier guidance of $8.05 to $8.15.
Cadence, a leading vendor in the electronic design automation (EDA) sector, supplies the software and hardware used to design and verify semiconductors and electronic systems. The company said demand for its offerings has accelerated as chipmakers and large technology firms, including Google and Amazon, design increasingly complex systems-on-a-chip (SoCs) and AI accelerators. Customers named by the company include AI-chip manufacturer Nvidia and Apple, among others.
In the first quarter, Cadence reported revenue of $1.47 billion, topping analysts' estimates of $1.45 billion, based on data compiled by LSEG. Quarterly adjusted profit came in at $1.96 per share, also above estimates of $1.90 per share.
Cadence highlighted strategic technology work in progress, including a partnership with Nvidia to combine physics engines - software that predicts how materials behave in the real world - with AI models intended to train robots within computer simulations. Earlier this year, the company also introduced an agent designed to handle the initial stages of chip design, a phase in which a processor's circuitry is expressed in a language resembling computer code.
The company note also referenced a Fair Value calculator service that uses a mix of 17 industry valuation models to evaluate stocks, suggesting it as a tool for investors assessing whether Cadence shares represent a bargain. The reference stated that the calculator applies multiple models for valuation consistency.
Market context and implications
Cadence's upward revision to its revenue outlook underscores persistent demand in the semiconductor design tool market driven by AI-focused chip development. The simultaneous reduction in the EPS outlook reflects narrower margin or expense considerations acknowledged by the company in its guidance update.