Cadence Design Systems, Inc.

“Cadence is one of the highest-quality software businesses globally — a mission-critical EDA duopolist with a 40-year algorithmic moat, ~87% recurring revenue, 20%+ ROIC, and a structural AI-driven demand tailwind that is widening the moat in real time. The sole investibility constraint is price: at $339.65 and 62x TTM FCF, the market cap already reflects the bull case, leaving base-case 10-year returns at ~8–12% annualized — uncompelling relative to the execution precision required. A 20–25% drawdown to the $255–$275 range would create a genuinely attractive entry; until then, the correct posture is to track closely and own it at the right price.”