Strong fundamentals and an attractive valuation have JPMorgan growing more optimistic on Cadence Design Systems . JPMorgan upgraded the software and chip design stock to overweight from neutral and upped its price target to $325 per share from $300. The new forecast implies roughly 22% upside from Wednesday's close. Analyst Harlan Sur noted investors should scoop up the stock after a nearly 12% year-to-date pullback. CDNS YTD mountain Cadence Design Systems stock in 2025. "The forward CY valuation is appealing and undemanding at 34x, at the low end of its trailing five-year range of 28x to 53x," Sur said. "Investors will increasingly be drawn to the defensive growth characteristics of Cadence amid a slowing macroeconomic environment and the limited impact of trade/tariffs." Sur estimated that Cadence is likely to overdeliver on its conservative full-year outlook, which didn't fully account for "the order/revenue/EPS upside potential from strong leading-edge chip design activity and share gain opportunities as the year unfolds." The analyst also pointed to President Donald Trump's first efforts with tariffs in 2018, during which the chip design software segment proved resilient. The stock also notched a more narrow loss during that time period compared to the broader PHLX Semiconductor index (SOX). "The team has consistently outperformed its initial annual revenue growth outlook expectations with an average beat of 150-200bps over the past two years and an average beat of 350-400 [basis points] over the past five years, and we anticipate continued outperformance this year," Sur continued. Shares rose more than 1% following the upgrade. Analysts are mostly bullish on the stock. Of the 21 who cover it, 17 rate it a buy or strong buy, per LSEG. The average analyst price target also signals 17% upside. Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today's dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles and Dan Ives, with a special edition of Pro Talks with Tom Lee. You'll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!
