Latest news with #CadenceDesignSystems
Yahoo
3 days ago
- Business
- Yahoo
Intel Stock Is a Speculative buy Because of This 1 Factor
Even with all of Intel's troubles, investors still have good reason to believe the stock is oversold. Although recovery prospects are uncertain, Intel continues to hold certain competitive advantages. 10 stocks we like better than Intel › The decline of Intel (NASDAQ: INTC) and the numerous failed efforts to recover its leadership in the chip market have undoubtedly frustrated many investors. The company has hired and dismissed several CEOs who have tried and failed to return Intel to competitiveness. So profound are its missteps that the stock trades at levels it first reached in 1997. The current CEO, Lip-Bu Tan, is the latest leader to try to get Intel back on track. Although Cadence Design Systems prospered under his leadership, succeeding at Intel is far from guaranteed. Nonetheless, risk-averse investors have at least one compelling reason to buy a speculative position in Intel, which investors should consider when deciding whether to buy the stock. In short, investors should buy Intel because of its valuation. In this case, the "valuation" does not come from the metrics one might initially assume, like the price-to-earnings (P/E) ratio. Falling profits and the recent turn back to losses led to a spike in the earnings multiple, taking it to 104. Due to an expected return to profitability, its forward P/E ratio is 66, but that does not make the stock inexpensive. The same goes for Intel's price-to-sales (P/S) ratio of 1.6. With analysts expecting revenue to fall by 5% during 2025, it will probably take more than a low sales multiple to convince investors to buy. Instead, investors need to look at the book value and, by extension, the price-to-book (P/B) ratio. In the first quarter of 2025, Intel reported a stockholders' equity of $106 billion, which is what Intel would net if it decided to liquidate its assets and cover its liabilities. However, when multiplying Intel's outstanding shares by the stock price, it adds up to a market cap of $88 billion. That translates into a P/B ratio of 0.88. Such a price means that if the company liquidated, shareholders could presumably create $18 billion by that action. Indeed, Intel has no plans to liquidate, meaning it will have to eventually unlock some of its intrinsic value to drive investor returns. This is difficult because the loss of its technical lead makes it more of a commodity chip business. Such stocks tend to have difficulty attracting a premium and outperforming the S&P 500, leaving cutting-edge stocks like Nvidia to attract premium pricing. Nonetheless, Intel still holds competitive advantages often overlooked by today's investors. For one, no company owns more foundries on U.S. soil than Intel. The government has pushed for domestic manufacturing, and Intel is investing in the most advanced equipment sold by ASML, which is necessary to make the world's most advanced chips. Additionally, it remains a force in the industry despite losing its title as the world's largest semiconductor company many years ago. In the first quarter of 2025, Intel generated $12.7 billion in revenue. Although that fell slightly from year-ago levels, that is well above the $7.4 billion in revenue generated by Advanced Micro Devices, making it a major industry player. Thus, if it finds a way to close its technical gap and draws more customers to its foundries, Intel could stage a comeback. Despite its numerous challenges, Intel stock is still a speculative buy for risk-averse investors. Admittedly, Lip-Bu Tan's attempt to transform Intel will take years to achieve, and that success is not guaranteed. However, even if Intel stock does not deserve a premium, the fact that it sells for well under its book value indicates the stock is oversold. Moreover, Intel remains influential in the semiconductor industry, and its foundry footprint could become valuable in the shifting political environment. Ultimately, Intel is unlikely to return to industry leadership. Still, as well-positioned as it is in the semiconductor industry, the ability to buy shares below book value significantly increases the odds that investors can profit from this stock. Before you buy stock in Intel, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Intel wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $653,389!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $830,492!* Now, it's worth noting Stock Advisor's total average return is 982% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Will Healy has positions in Advanced Micro Devices and Intel. The Motley Fool has positions in and recommends ASML, Advanced Micro Devices, Cadence Design Systems, Intel, and Nvidia. The Motley Fool recommends the following options: short May 2025 $30 calls on Intel. The Motley Fool has a disclosure policy. Intel Stock Is a Speculative buy Because of This 1 Factor was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
3 days ago
- Business
- Yahoo
2 Brilliant Stocks to Buy With $100 and Hold for 5 Years
Intel's focus on aggressive cost-cutting and edge AI help position it as a turnaround story. Toast is improving its revenue mix and increasing client adoption of its AI-powered tools. 10 stocks we like better than Intel › The U.S. equity markets have been quite turbulent in 2025, affected by escalating geopolitical pressures, protectionist tariffs, and high interest rates. Not surprisingly, investors are shying away from high-growth, high-risk stocks and moving toward defensive plays. Yet, this period of volatility also offers long-term investors an opportunity to buy exceptional stocks at reasonable prices. All that is needed is a modest sum of $100, not required to pay for immediate needs. Buying even one of these two fundamentally strong businesses below can position you on a multi-year growth trajectory. Here's why. Intel's (NASDAQ: INTC) recent earnings performance for the first quarter was mixed. While revenue and earnings surpassed consensus estimates, investors were disappointed by the company's weak guidance for the second quarter of fiscal 2025. Despite this, many factors are working in Intel's favor, especially with the company hiring Lip-Bu Tan, who's credited with the turnaround of Cadence Design Systems, as its new CEO. The company has plans to aggressively reduce operating expenses to $17 billion in fiscal 2025, $500 million lower than the previous estimate, and to $16 billion in fiscal 2026. Intel also focuses on better asset utilization to reduce capital expenditures (capex) from the last estimate of $20 billion to $18 billion. Beyond cost savings, Intel is also gearing up to become a significant beneficiary of the ongoing AI revolution. While Nvidia and Advanced Micro Devices are ahead in the AI race, Intel is now developing full-stack AI solutions to enable the next wave of AI-powered computing. The company aims to improve accuracy, power efficiency, and security in running next-generation enterprise workloads such as reasoning models, physical AI, and agentic AI. Intel is also focusing on the edge AI market, which is estimated to grow from $53.5 billion in 2025 to $82 billion in 2030. Gartner expects half of the enterprise-managed data to be processed outside data centers or the cloud, in manufacturing plants, retail outlets, and healthcare facilities. These applications require low power and efficient architectures in areas where the company has excelled. Intel's 18A manufacturing process technology has also become a significant competitive advantage, thanks to its higher performance and improved power efficiency. With this technology, the company has built an AI PC client processor called Panther Lake and a server processor called Clearwater Forest. By demonstrating successful "booting of operating systems without additional configurations or modifications," these processors have highlighted the strength of 18A process technology. Subsequently, Intel Foundry has now emerged as an underappreciated asset in the company's portfolio. It's added two companies in the defense industry, while industry reports claim that Amazon and Microsoft are also exploring partnerships for 18A capabilities. Furthermore, Intel Foundry also engages with customers for Intel 14A process technology (a successor to 18A). Intel shares are trading 1.7 times sales, lower than their five-year average of 2.3. Hence, considering the company's many tailwinds and bargain valuation, the stock appears a smart buy now. In the past few years, Toast (NYSE: TOST) has transformed itself from a basic mobile payment application company into a complete operating system for the restaurant industry, including kitchen operations, restaurant and menu services, inventory tracking, payment processing, multilocation management, customer engagement, and data analytics. Toast currently serves 140,000 restaurant locations in the U.S., only 10% of the 1.4 million locations across its customer segments. While the company's current stronghold is in the U.S. small-to-medium-sized business market, management also focuses on enterprise customers, food and beverage retail, and international market clients. This indicates massive room for growth in the existing markets. Toast has leveraged advanced AI-powered technologies to boost average order volume and ensure effective advertising. The company has launched an AI engine, ToastIQ, which combines AI, restaurant expertise, and proprietary data. ToastIQ's features help clients with business insights, troubleshooting, marketing, employee scheduling, and pricing. The company's recent financial and operational performance for the first quarter has been impressive. Revenue was up 24.4% year over year to $1.34 billion, while operating income was $43 million, a dramatic improvement from the $56 million loss in the same period last year. Subscription revenue increased by 38% to $209 million. This shift toward more visible, sticky, and higher-margin subscription revenues is a positive. The company also reported free cash flows of $69 million -- an impressive feat, since the first quarter is typically the seasonally weakest. Toast added over 6,000 net new locations to reach approximately 140,000 total locations in the first quarter. This also included major enterprise wins, which are strong positives, as they usually demonstrate significant annual recurring revenues and lower churn rates. Toast trades at about 5 times sales, higher than its three-year average of 3.8. Although the valuation may appear expensive, it seems justified for a company with a huge addressable market, strong financial and operational metrics, and a broad customer base. Hence, the stock looks like a worthwhile buy now. Before you buy stock in Intel, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Intel wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $653,389!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $830,492!* Now, it's worth noting Stock Advisor's total average return is 982% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Manali Pradhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon, Cadence Design Systems, Intel, Microsoft, Nvidia, and Toast. The Motley Fool recommends Gartner and recommends the following options: long January 2026 $395 calls on Microsoft, short August 2025 $24 calls on Intel, and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. 2 Brilliant Stocks to Buy With $100 and Hold for 5 Years was originally published by The Motley Fool
Yahoo
3 days ago
- Business
- Yahoo
Cadence Design Systems (NasdaqGS:CDNS) Price Rises 14% Over Last Quarter
In May 2025, Cadence Design Systems launched the Millennium M2000 Supercomputer, delivering enhanced AI-accelerated simulations, alongside the Tensilica NeuroEdge 130 AI Co-Processor, optimizing neural processing. Despite these advancements, broader market trends like investor optimism over reduced tariffs between the U.S. and China may have provided a conducive environment for Cadence's stock price to rise 14% during the last quarter, aligning with the broader technology market movement. Meanwhile, Q1 2025 earnings demonstrated strong financial results, potentially reinforcing investor confidence amidst this upward trajectory. Buy, Hold or Sell Cadence Design Systems? View our complete analysis and fair value estimate and you decide. We've found 18 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. Cadence Design Systems' recent advancements in AI-accelerated simulations and neural processing, through the Millennium M2000 Supercomputer and Tensilica NeuroEdge 130 AI Co-Processor, can potentially strengthen its AI-driven design and verification tools portfolio. These innovations may boost revenue, meeting increasing demand for their AI-enabled offerings and supporting future earnings growth. Analysts expect revenue to rise, driven by strong IP business performance and expanding partnerships with major industry players, though geopolitical risks pose challenges. Over the past five years, Cadence experienced a total shareholder return of 211.71%, reflecting robust long-term growth. However, when comparing performance over the past year, Cadence underperformed the US Software industry, which returned 22.8%. This short-term underperformance contrasts with the company's five-year success and may influence investor perceptions. Despite the recent positive news, Cadence's current share price of US$305.78 is relatively close to the consensus analyst price target of US$319.32, representing a modest 4.2% upside. This suggests that while recent developments are promising, the market may already be pricing in these advancements. Investors are encouraged to weigh these factors alongside the analysts' forecasts and company valuation when considering their stance on Cadence's long-term potential. Click here and access our complete financial health analysis report to understand the dynamics of Cadence Design Systems. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include NasdaqGS:CDNS. This article was originally published by Simply Wall St. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@
Yahoo
3 days ago
- Business
- Yahoo
Why Cadence Design Systems, Inc. (CDNS) Went Down On Wednesday
We recently published a list of . In this article, we are going to take a look at where Cadence Design Systems, Inc. (NASDAQ:CDNS) stands against other worst-performing stocks. Cadence Design dropped its share prices by 10.67 percent on Wednesday to finish at $288.61 apiece as reports that it was ordered by the US government to stop selling their software to China weighed down on investor sentiment. According to a report by the Financial Times, the Commerce Department instructed Cadence, alongside competitors Synopsis and Siemens EDA, to stop selling their designs to China. Synopsis, however, denied the report, saying it had not received any word from the government. An office of software engineers and designers collaborating on a digital project. The Chinese market was Cadence Design Systems, Inc.'s (NASDAQ:CDNS) fourth-largest market in terms of revenue mix, accounting for 11 percent of its revenues during the first quarter of the year. Americas remained the largest with 48 percent, followed by other Asian countries with 19 percent, and the EMEA (Europe, Middle East, and Africa) at 16 percent. If reports are true, the directive could significantly hurt the company's profits and margins in the future. Overall, CDNS ranks 6th on our list of worst-performing stocks. While we acknowledge the potential of CDNS our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than CDNS and that has 10,000x upside potential, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
3 days ago
- Business
- Yahoo
Why Cadence Design Systems Plunged Late in the Day Today
A late-day news article said the Trump administration had asked major EDA firms like Cadence to stop selling to China. China made up 12% of Cadence's revenue last year. The worst may have already been priced in, in the last hour of trading. 10 stocks we like better than Cadence Design Systems › Shares of electronic design automation company Cadence Design Systems (NASDAQ: CDNS) dropped late Wednesday, finishing the day down 10.4%. Cadence is just one of a handful of companies that makes the software semiconductor designers use to design chips. With the increasing variety of chips and number of chipmakers proliferating over the past decade, it has been an excellent business. However, a Financial Times article published late Wednesday said that the Trump administration may cut off these companies' Chinese revenues. Late on Wednesday, the Financial Times said the Trump administration's Commerce Department has instructed Cadence, along with its oligopoly competitors Synopsis and Siemens EDA, to stop selling their software to China. The past couple of presidential administrations have been grappling with how to slow China's advances in artificial intelligence (AI) technology, without hurting U.S.-based chipmakers that also sell into China's massive market. Past administrations have already cut off the most advanced semiconductor manufacturing equipment to China, but if the FT article is correct, it appears the Trump administration may be attempting to cut the leading chip design software technologies off as well. In its most recent annual report, Cadence stated that China made up about 12% of its revenue, down from 17% in the prior year. So, it's perhaps no wonder Cadence's stock is down by roughly the same percentage today. It's hard to draw conclusions from this late-day FT piece, but it appears that the market may already be pricing in a worst-case scenario already, given the sudden double-digit decline. That said, Cadence was an expensive stock to begin with, as shares were trading at 82 times trailing and 47 times forward earnings coming into the day. As is the case with most leading chipmakers and semiconductor-oriented names, these are generally high-quality businesses with strong growth outlooks on the back of the AI boom; however, that means they are also vulnerable to geopolitics. It makes for a volatile brew. That being said, Foolish investors shouldn't shy away from chip stocks, as semis have been the best-performing sector over the past decade. Before you buy stock in Cadence Design Systems, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Cadence Design Systems wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $653,389!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $830,492!* Now, it's worth noting Stock Advisor's total average return is 982% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Billy Duberstein has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cadence Design Systems and Synopsys. The Motley Fool has a disclosure policy. Why Cadence Design Systems Plunged Late in the Day Today was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
