New Chip Designs Are Booming, and This Stock Stands to Benefit
With the early pandemic boom now in the rearview mirror, semiconductor stocks got bludgeoned this year by the bear market. The latest worry comes from new U.S. export curbs on sales to China, adding to jittery nerves over a big slump next year -- especially if a recession strikes. Despite the pessimism in 2022, massive amounts of money were spent this year on new chip design research.
Cadence Design Systems (NASDAQ: CDNS) offers a good example of this dichotomy. Despite various headwinds, Cadence just had an excellent quarter and provided a rosy outlook going forward. Is this chip stock a buy?
Cadence design is what's known as an electronics design automation (EDA) company. Basically, it's software that helps design engineers streamline and accelerate their work on semiconductors and computing systems. Given the staggering complexity of designing modern chips, EDA is a powerful software suite that combines various elements like computer-aided design, physics-based simulation, and system verification.
Source Fool.com
