[Platinum] 3 stocks to watch for AI revolution #1

#1 Cadence Design System (Ticker: CDNS) 

Cadence Design System: Primarily offers electronic design automation (EDA) software and hardware: these tools play an integral role in the electronics design chain, as they’re used to develop analog, RF, mixed-signal and custom chip designs, as well as improve the time it takes to design digital parts of chips.  

Cadence Verification Suite: verifies chip designs before the chip is set in silicon which can reduce system integration times by up to 50%.   

Provide digital integrated circuit (IC) design products, implementation tools, system interconnect design products, intellectual property (IP) products and verification IP and memory models.  

PARTNERSHIPS 

Ambarella (summer, 2020):  began using Cadence Design’s Clarity 3D Solver for the former’s next-generation AI vision processors. These products are ultimately used in products like video security systems, advanced driver assistance systems (ADAS), electronic mirrors and drive recorders, driver/cabin monitoring, autonomous driving and robotic applications.  

Samsung (October, 2020): allow mutual customers of both companies to use Cadence’s automated circuit design, layout, signoff and verification flow for eventual use in automotive, mobile, data center, AI and other applications.  

Toshiba: Uses the Cadence Tensilica Vision P6 DSPs in its ADAS chip. Cadence’s Vision P6 DSPs offers enhanced performance and 3.8 times more power efficiency than other CPUs that are used for vision and AI applications. Toshiba noted that Cadence’s Vision P6 DSPs are a perfect fit for automotive applications, as the company can now enable multiple driver-assistance functions on one chip, in real time.

NUMBERS 

Q4 2021

– $0.82 per share on $773 million in sales ($0.83 per share and sales of $759.91 million in the same quarter 2020) 

– Analysts were expecting adjusted earnings of $0.76 per share and revenue of $757.19 million.  

Fiscal year 2021

– Adjusted earnings of $918 million, or $3.29 per share, and total sales of $2.99 billion. That represents 17.4% annual earnings growth and 11.6% annual sales growth.  

– Analysts were looking for adjusted earnings of $3.13 per share on $2.97 billion in sales.  

Q1 2022

– Anticipates revenue between $850 million and $870 million and adjusted earnings per share between $1.00 and $1.04. ($0.83 per share and revenue of $736.03 million in the first quarter of 2021)  

Fiscal year 2022

– Expects total revenue between $3.32 billion and $3.38 billion and adjusted earnings per share between $3.70 and $3.80.