Cadence Design Systems Stock Prediction: Where Analysts See the Stock Going by 2027

Nikko Henson • 5 minute read

Last updated Nov 15, 2025

Cadence Design Systems (NASDAQ: CDNS) trades near $315/share today. The stock has held up well despite volatility across the semiconductor sector, supported by strong long term fundamentals and steady demand for chip design software. Cadence continues to benefit from rising chip complexity, AI workloads, and deep relationships with major semiconductor customers.

Recently, Cadence delivered another solid quarter with strong margins and growing adoption of its AI driven design tools. The company also announced new partnerships with leading chipmakers focused on next generation AI and advanced packaging technologies. These developments show Cadence is becoming even more essential as semiconductor design grows more complex.

This article explores where Wall Street analysts expect Cadence to trade by 2027. We used consensus targets and TIKR’s Guided Valuation Model to outline the stock’s potential path. These figures reflect current analyst expectations and are not TIKR’s own predictions.

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Analyst Price Targets Suggest Modest Upside

Cadence trades at about $315/share today. The average analyst price target is around $382/share, which suggests roughly 21% upside. Analyst opinions vary, but most lean constructive:

High estimate: ~$418/share
Low estimate: ~$225/share
Median target: ~$393/share
Analyst ratings: 14 Buys, 5 Outperforms, 4 Holds, 1 Sell

Most analysts see room for continued gains, but expectations remain measured. For investors, this indicates modest upside that could strengthen if Cadence maintains its strong growth patterns and margin discipline.

Cadence Design Systems stock — Cadence Design Systems Analyst Price Target

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Cadence: Growth Outlook and Valuation

The company’s fundamentals appear strong based on the model inputs:

Revenue growth: 12.9%
Operating margin: 45.2%
Shares valued using a 40.9x forward P E
Based on analysts’ average estimates, TIKR’s Guided Valuation Model suggests ~$420/share by 2027
That implies about 33% upside, or roughly 15% annualized returns

These numbers point to a business that can continue compounding at a steady pace. Cadence’s high margin structure, recurring software revenue, and essential role in chip design support a long runway for growth.

For investors, the setup is straightforward. Cadence does not need explosive growth for the stock to work. As long as demand for advanced design tools stays strong and the company maintains its margin discipline, returns should remain attractive over the long term.

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What’s Driving the Optimism?

Cadence sits at the center of the semiconductor design process. Its software is essential for building the chips that power AI, cloud computing, automotive systems, and consumer devices. As chip designs become more complex, customers rely even more on Cadence’s tools, which strengthens pricing power and long term relationships.

The company is also expanding into newer areas like system simulation and AI accelerated design flows. These offerings help customers shorten development cycles and improve performance, making Cadence even harder to replace. For investors, these structural tailwinds support confidence in Cadence’s ability to compound steadily.

Bear Case: Valuation and Cyclicality

Despite its strengths, Cadence trades at a premium valuation that requires careful attention. Any slowdown in semiconductor spending or customer budgets could create pressure, even though EDA software is generally more stable than other parts of the industry.

Competition from Synopsys and emerging niche players is another factor worth monitoring. For investors, the key risk is that high expectations may already be priced in, which could limit near term upside if growth moderates.

Outlook for 2027: What Could Cadence Be Worth?

Based on analysts’ average estimates, TIKR’s Guided Valuation Model suggests Cadence could trade near $420/share by 2027. That would represent roughly 33% upside from today, or about 15% annualized returns.

These projections assume Cadence maintains its strong margin profile and steady double digit growth. Upside could be higher if AI driven chip design continues accelerating. However, if industry spending softens or valuations compress, returns could be more modest.

For investors, Cadence remains a premium software compounder with a durable competitive position. The long term opportunity looks solid, and the stock still offers meaningful potential if the company continues executing well in fast growing segments like AI, advanced packaging, and system level design.

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