What Happened?

Shares of semiconductor design software provider Cadence Design Systems (NASDAQ: CDNS) jumped 13.1% in the afternoon session after the company reported impressive third-quarter earnings that blew past analysts' revenue and billings expectations. The strength was broad-based on strong double-digit sales growth recorded in the System Design & Analysis and IP segments. The Q4 bookings pipeline was described by management as “exceptionally strong”, suggesting a healthy rebound in the company's backlog. This was a very good quarter.

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What The Market Is Telling Us

Cadence’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. Moves this big are rare for Cadence and indicate this news significantly impacted the market’s perception of the business.

Cadence is up 8.1% since the beginning of the year, but at $284.26 per share, it is still trading 12.9% below its 52-week high of $326.50 from June 2024. Investors who bought $1,000 worth of Cadence’s shares 5 years ago would now be looking at an investment worth $4,309.

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