Cadence Design Systems has upgraded its full-year revenue and profit guidance, citing robust demand for its artificial intelligence-powered chip and system design software.
The semiconductor software provider indicated that the acceleration in AI infrastructure spending is driving stronger-than-anticipated adoption of its electronic design automation (EDA) tools.
Shares of Cadence rose more than 5% in extended trading following the announcement.
Shares of Cadence rose more than 5% in extended trading following the announcement.
The move underscores the breadth of the AI investment cycle, which is now extending beyond hardware manufacturers to the essential software layer that enables chip development.
Investors are interpreting the upgrade as confirmation that the current capex boom in data centers is translating into tangible earnings growth for upstream suppliers.
The development aligns with broader sector trends, including recent guidance increases from foundry giant TSMC, which also cited strong AI chip demand.