Cadence Design Systems is well ahead of its artificial intelligence peers when it comes to delivering steady returns, according to Bank of America. The electronic systems design company is a "high-quality growth compounder" that's "well levered to AI," analyst Vivek Arya said in a Wednesday note to clients. Cadence develops software, hardware and intellectual property that is used to design chips and printed circuit boards, among other related products.
"Like most long-term compounders, the true value of CDNS is often better felt when market becomes defensive," Arya said in a Wednesday note to clients. "Over the past decade CDNS has delivered 33% annualized returns, 300bps ahead of rival SNPS , and among top 5 across our coverage, well-ahead of SOX index up 25%. Importantly, CDNS stock has outperformed the SOX index each of the 18 times the SOX index declined by over 10% since 2010.