Driving artificial intelligence and other advanced technology innovations, Cadence Design Systems has sparked strong demand among top investors. CDNS stock has scored a perfect trifecta among IBD stock screens, earning a spot on the IBD 50, Big Cap 20 and Long-Term Leaders lists.
Plus, the AI and machine learning leader makes the IBD Breakout Stocks Index, as well as March's list of new buys by the best mutual funds.
Top money managers scooped up an estimated $469 million worth of shares in CDNS stock. Plus, 76 funds with an "A"+ or "A" rating from IBD have a position in Cadence Design Systems.
With a 99 Composite Rating, Cadence ranks just behind PDF Solutions for top billing in the Computer Software-Design industry group.
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Cadence Design Systems: AI, Cloud Computing And Beyond
Based in the heart of Silicon Valley, Cadence Design Systems has lifted into leadership in electronic systems design. The tech superstar applies its underlying Intelligent System Design strategy to deliver software, hardware and IP that turn design concepts into reality.
It boasts prominent footprints in a range of high-tech fields, including artificial intelligence and machine learning, cloud computing, 3D technology, and AI-enabled big data analytics. Market applications for its technology include hyperscale computing, 5G communications, automotive, mobile, aerospace, consumer, industrial and health care.
Cadence Design Systems sports a very strong earnings stability rating of 3. In this IBD ranking between 1 and 99, companies that score the lowest show the most stable earnings growth. Among the current list of 10 IBD Long-Term Leaders, only MSCI gets a better score.
On Feb. 13, Cadence released Q4 and 2022 numbers, reporting annual revenue of $3.56 billion, compared to $2.99 billion in 2021.
IBD Stock Checkup shows how efficiently the company is run. Cadence Design Systems sports an "A" SMR Rating, which tracks sales growth, profit margins and return on equity. That rating gets a boost from the 39.9% annual pretax profit margin and 42.8% return on investment.
CDNS Stock Bounces Into Buy Zone
With its relative strength line soaring, Cadence Design Systems has weathered stock market turbulence, getting a nice bounce off its 21-day exponential moving average.
After posting Q4 earnings, CDNS stock gapped up on Feb. 14, clearing a 195.07 buy point in an early-stage cup pattern. While it ran into some resistance as the market indexes came under pressure, it held its ground right around the entry.
Cadence Design Systems has now cleared the buy point once again and closed Tuesday near the top of buy zone.
Given the bank crisis, inflation concerns and market volatility, investors should proceed with caution. But strong demand among the best mutual funds and the company's leadership in AI, cloud computing and other key trends bodes well for the stock.
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Follow Matthew Galgani on Twitter at @IBD_MGalgani.
