Cadence Design

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ISIN: US1273871087

Ticker: CDNS

US1273871087

CDNS

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Elsa E.

@EpsEra

2J·

Build robots, earn shovels

The hype is all about humanoid robots, but the constant winners are in the background.

I have divided the analysis into two perspectives. 1. the complete value chain of humanoid robots, which shows all the players from the chip to the finished robot, and 2. the blade manufacturers in the background, who always earn money as enablers, regardless of which manufacturer wins the race.

ASML, Applied Materials and Tokyo Electron dominate in manufacturing technology. Quality assurance comes from Keysight, Advantest and Teradyne. Chip design is supported by Synopsys, Cadence and ARM. Data streams are secured by Arista Networks, Cisco and Equinix. The computing basis is created in the cloud by Amazon, Microsoft and Alphabet. Albemarle, Lynas and Umicore play a central role in raw materials and battery materials. These companies monetize their customers' investment waves, have high barriers to entry, service revenues and pricing power, but remain cyclical with risks from export rules, capex cuts and currency movements.

🌐 Value chain of humanoid robots Sector overview

1. research & chip design (IP / EDA)

$ARM (-0,09 %)
ARM Holdings (ARM, UK/USA) - CPU architectures

$SNPS (+1,12 %)
Synopsys (SNPS, USA) - Chip design software

$CDNS (-0,3 %)
Cadence Design Systems (CDNS, USA) - EDA & Simulation

2. manufacturing technology & equipment

$ASML (+0,57 %)
ASML (ASML, NL) - EUV lithography, key monopoly

$AMAT (+0,12 %)
Applied Materials (AMAT, USA) - Process equipment

$8035 (-2,22 %)
Tokyo Electron (8035.T, JP) - Wafer equipment

$KEYS (+0,16 %)
Keysight Technologies (KEYS, USA) - Test & RF measurement technology

$6857 (-1,47 %)
Advantest (6857.T, JP) - Semiconductor test systems

$TER (+0,59 %)
Teradyne (TER, USA) - Test systems + robotics (Universal Robots)

3. chip production (Foundries)

$TSM (-0,1 %)
TSMC (TSM, TW) - Largest contract manufacturer

$005930
Samsung Electronics (005930.KQ, KR) - Memory + Foundry

$GFS (-0,34 %)
GlobalFoundries (GFS, USA) - Specialized production

4. computing & control unit ("brain")

$NVDA (-1,09 %)
Nvidia (NVDA, USA) - GPUs, AI accelerators

$INTC (+0,05 %)
Intel (INTC, USA) - CPUs, FPGAs

$AMD (-0,91 %)
AMD (AMD, USA) - CPUs/GPUs

$MRVL (+0,24 %)
Marvell Technology (MRVL, USA) - Network/data center chips

5. sensors ("senses")

$6758 (+2,57 %)
Sony (6758.T, JP) - CMOS image sensors

$6861 (-0,67 %)
Keyence (6861.T, JP) - Vision systems, sensors

$STM (+2,24 %)
STMicroelectronics (STM, CH/FR) - MEMS sensors

6. actuators & power electronics ("muscles")

$IFX (+0,73 %)
Infineon (IFX, DE) - Power semiconductors, SiC

$ON (+0,37 %)
N Semiconductor (ON, USA) - SiC/Power Chips

$STM (+2,24 %)
STMicroelectronics (STM, CH/FR) - Motor control & power

$TXN (-0,08 %)
Texas Instruments (TXN, USA) - Motor control, power ICs

$ADI (+0,06 %)
Analog Devices (ADI, USA) - Energy & BMS chips

7. communication & networking ("nerves")

$QCOM (+0,02 %)
Qualcomm (QCOM, USA) - 5G/SoCs

$AVGO (+0,61 %)
Broadcom (AVGO, USA) - Network & radio chips

$SWKS (+0,19 %)
Skyworks Solutions (SWKS, USA) - RF components

8. energy supply

$300750
CATL (300750.SZ, CN) - Batteries

$6752 (+1,82 %)
Panasonic (6752.T, JP) - Batteries for automotive/robotics

$373220
LG Energy Solution (373220.KQ, KR) - Batteries

9. cloud & infrastructure

$AMZN (+0,3 %)
Amazon (AMZN, USA) - AWS

$MSFT (+0,41 %)
Microsoft (MSFT, USA) - Azure

$GOOG (+0,99 %)
Alphabet (GOOGL, USA) - Google Cloud

$EQIX (+0,76 %)
Equinix (EQIX, USA) - Data center operator

$ANET (-0,32 %)
Arista Networks (ANET, USA) - Network infrastructure

$CSCO (+0,27 %)
Cisco Systems (CSCO, USA) - Edge & Data Center Networks

10. software & data platforms

$PLTR (-0,5 %)
Palantir (PLTR, USA) - Data integration, decision software

$DDOG (+0,31 %)
Datadog (DDOG, USA) - Cloud monitoring / observability

$SNOW (-0,08 %)
Snowflake (SNOW, USA) - Cloud-native data platform

$ORCL (+0,17 %)
Oracle (ORCL, USA) - Databases, ERP

$SAP (-0,06 %)
SAP (SAP, DE) - ERP/cloud systems

$PATH (+0,34 %)
UiPath (PATH, USA) - Automation software (RPA)

$AI (+0,7 %)
C3.ai (AI, USA) - Enterprise AI platform

11. end applications / robots

$ABB
ABB (ABB, CH) - Industrial robots

$6954 (-0,59 %)
Fanuc (6954.T, JP) - Industrial robots, CNC

$TSLA (+0,41 %)
Tesla (TSLA, USA) - Optimus" humanoid robot

$9618 (+0,65 %)
JD.com (JD, CN) - E-commerce & automated logistics

🛠️ Shovel manufacturer for humanoid robots

🔹 Hardtech (physical "shovels")

These companies provide the material basis: manufacturing machines, raw materials, semiconductor base.

Semiconductor Equipment & Manufacturing

$ASML (+0,57 %)
ASML (ASML, NL) - EUV lithography (monopoly).

$AMAT (+0,12 %)
Applied Materials (AMAT, USA) - Wafer equipment.

$8035 (-2,22 %)
Tokyo Electron (8035.T, JP) - Process equipment.

Test systems (hardware-side)

$6857 (-1,47 %)
Advantest (6857.T, JP) - Semiconductor test.

$TER (+0,59 %)
Teradyne (TER, USA) - Test systems + industrial robots.

Materials & raw materials

$ALB (-1,34 %)
Albemarle (ALB, USA) - Lithium (batteries).

$LYC (-0,79 %)
Lynas Rare Earths (LYC.AX, AUS) - Rare earths for magnets.

$UMICY (+1,23 %)
Umicore (UMI.BR, BE) - Cathode materials, recycling.

🔹 Soft/infra (digital "shovels")

These companies supply the infrastructure & toolswithout which development, training and operation would be impossible.

Design Software & IP

$SNPS (+1,12 %)
Synopsys (SNPS, USA) - EDA software.

$CDNS (-0,3 %)
Cadence Design Systems (CDNS, USA) - Chip design & simulation.

$ARM (-0,09 %)
ARM Holdings (ARM, UK/USA) - CPU architectures (license model).

Test & Measurement (software/signal level)

$KEYS (+0,16 %)
Keysight Technologies (KEYS, USA) - Electronics & RF test systems.

Network & data center backbone

$ANET (-0,32 %)
Arista Networks (ANET, USA) - High-speed networks.

$CSCO (+0,27 %)
Cisco Systems (CSCO, USA) - Data center/edge networks.

$EQIX (+0,76 %)
Equinix (EQIX, USA) - Data centers (colocation).

Cloud infrastructure

$AMZN (+0,3 %)
Amazon (AMZN, USA) - AWS (cloud, AI training).

$MSFT (+0,41 %)
Microsoft (MSFT, USA) - Azure.

$GOOG (+0,99 %)
Alphabet (GOOGL, USA) - Google Cloud.

Takeaway: Investing in the infrastructure stack allows you to participate in the robotics trend regardless of the subsequent product winner and reduces the individual product risk, but you have to live with cycles. In your opinion, which stage of the chain offers the best risk/return combination and fits into a disciplined portfolio?

Source: Own analysis based on publicly available company information and IR materials of the companies mentioned.

Image material: Techa Tungateja/iStockphoto

15 Commentaires

GHF@GHF

You can use this to set up your own ETF😉

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wealth.builder101

@wealth_builder101

2J·

My core principles - Which stock to trim?

I am looking to sharpen my knife and trim my portfolio down to only 15 stocks. Which stocks would you suggest I cut/sell and which ones would you put more emphasis on? Let me know in the comments!

Over the years, I’ve sharpened my strategy down to a focused portfolio built on true compounders. Here’s what guides my stock picking:

High Capital Returns – I only want companies with top-tier ROIC & ROCE, not just “good” but best in class.
Predictable Growth – earnings and free cash flow need to grow steadily, not in cycles.
Strong Margins – wide gross margins, healthy operating margins, and high free cash flow conversion.
Global Megatrends – every holding should profit from long-term, accelerating trends.
Quality over Quantity – I’d rather own ~20 world-class businesses than chase diversification for its own sake.
Long-Term Horizon – 5+ years minimum. Buy, hold, and compound.

here’s my current holdings:

1 Commentaire

No real advice. $MC is trying to set a bottom. Location wise it's about pre corona level witch maybe interesting.

$ASML is under value, short term 680 seems to be fair. Probably more potential.

On your other holding's I don't have a opinion.

•

wealth.builder101

@wealth_builder101

2Mo·

Challenge my holdings!

I challenge you to critique my current holdings. Any critique is welcome. Go!

Here are my current holdings:

2 Commentaires

2Mo

Too many

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wealth.builder101

@wealth_builder101

2Mo·

Why I own them

Today I want to share with you 5 of my holdings and tell you exactly "why I own them" - a quick overview of why I got a strong conviction:

1. $MSFT (+0,41 %) sells its leading software and services to both consumers and enterprises. The company's Azure cloud platform and Office 365 suite have significantly driven growth. Microsoft generates 50% of its revenue from the US and 50% internationally. Millions of individuals and businesses worldwide rely on Microsoft's software and productivity tools for their daily operations. Future growth should be propelled by its cloud services, AI and strong enterprise software demand.

-- FCF ROC: 19% I FCF Growth: 15% I FCF Linearity: 0.95 --

2.$MA (+0,18 %) a major player in global payments processing, offers credit, debit and prepaid cards, along with digital payment solutions to consumers and businesses worldwide. Mastercard processes close to $6tn transactions per year. Mastercard generates 35% of its revenue from the Americas and the rest internationally. Like Visa, growth has been driven by the shift from cash to digital payments and expanding global commerce. Mastercard's extensive network, strong brand and advanced security measures offer a significant competitive edge.

-- FCF ROC: 42% I FCF Growth: 15% I FCF Linearity: 0.95 --

3. $MSCI (+0,43 %) sells investment decision support tools, including indices, portfolio risk and performance analytics, to institutional investors globally. Over $1 trillion in ETF assets are linked to MSCI indexes. Growth has been driven by the increasing adoption of its indices for benchmarking and passive investment products like ETFs. MSCI's strong brand reputation, comprehensive data and analytics capabilities give it its competitive advantage.

-- FCF ROC: 31% I FCF Growth: 18% I FCF Linearity: 1.00 --

4. $CDNS (-0,3 %) sells electronic design automation (EDA) software predominantly to the semiconductor industry. 44% of revenue is from the US. Cadence has benefited from the increasing complexity of chip designs and the demand for advanced electronic devices. Its competitive advantages include a comprehensive suite of design tools and long-standing industry relationships. Cadence is well-positioned to capitalise on its critical role in the design process.

-- FCF ROC: 31% I FCF Growth: 19% I FCF Linearity: 0.99 --

5. $FTNT (+0,08 %) provides cybersecurity, including firewalls, antivirus software, intrusion prevention systems and endpoint security, to enterprises and service providers. They have over 730,000 customers across most industries, including healthcare, finance, tech and government. Future growth drivers include the expanding cybersecurity market, adoption of cloud security and growing demand for secure network solutions.

-- FCF ROC: 49% I FCF Growth: 27% I FCF Linearity: 0.99 --

Tino

@parlania

2Mo·

Trump calls on US chip designers to stop selling to China,

$SNPS (+1,12 %)
$CDNS (-0,3 %)

https://de.marketscreener.com/kurs/aktie/SYNOPSYS-INC-4908/news/Trump-fordert-US-Chipdesigner-auf-Verkauf-nach-China-einzustellen-berichtet-die-Financial-Times-50093259/

de.marketscreener.comTrump fordert US-Chipdesigner auf, Verkauf nach China einzustellen, berichtet die Financial Times

14 Commentaires

Davut@DK_552

2Mo

Old Swede... just bought today and it's already going down!

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wealth.builder101

@wealth_builder101

2Mo·

My investable universe

When I‘m screening markets for my investable universe I look for high-quality compounders with:

Strong and consistent capital returns (ROCE)
High and stable profitability (gross, operating, and FCF margins)
Steady revenue growth over time
Large market capitalization (mature, established companies)

In detail I’m screening for:

Market Cap: at least $ 10B
ROCE 3-Year Avg: ≥ 25%
ROCE 10-Year Avg: ≥ 25%
Gross Margin 3-Year Avg: ≥ 50%
FCF Margin 3-Year Avg: ≥ 20%
Operating Margin 10-Year Avg: ≥ 25%
Revenue per share CAGR 3-Year: ≥ 5%
Revenue per share CAGR 10-Year: ≥ 5%
FCF per share CAGR 3-Year: ≥ 10%
FCF per share CAGR 10-Year: ≥ 10%
Consistency/stability of earnings (from max. 1.0): ≥ 0.8
No more than 75% revenue exposure to one single country/market (eg. USA)

Here are my current holdings:

2Mo·

My Portfolio

Today I‘m sharing with you my main portfolio. This doesn’t include any ETF investments and crypto currencies / gold etc. since I want to focus my presence on getquin on stock-picking.

Read my 3-part portfolio strategy posts to get the full picture - here are just the main pillars of what I‘m doing:

Long-term buy and hold (average holding time 5+ years at least)
Focus on high-ROIC compounders riding secular trends (top-tier capital efficiency)
High margins, strong FCF growth, large moats (7 powers strategy)
Holding not more than 20 stocks at a time while mainly focusing on US and EU based companies

I like to divide my holdings into „core holdings“ (forever stocks) and „trend picks“ (2030 stocks) as follows:

Core Holdings (“Forever Stocks”):

Growth Picks (“2030 Stocks”):

20Positions

37,12 %

4 Commentaires

risk_taker_1816@risk_taker_1816

2Mo

Amazon 2,5k% Plus damn what’s you’re buy in on that one

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wealth.builder101

@wealth_builder101

2Mo·

My portfolio strategy (part 3)

I use the 7 Powers framework from the book “7 Powers: The Foundations of Business Strategy” by Hamilton Helmer. It’s a killer framework for understanding why some businesses create lasting value and compound returns over time.

Each “Power” is a sustainable strategic advantage that lets a company generate outsized returns for a long time. I ask the 7 questions for each stock I am considering to buy.

1. Counter-Positioning

What it is: A new entrant adopts a superior business model that incumbents can’t copy without damaging their own biz.
Example: Netflix vs. Blockbuster. Blockbuster couldn’t move to streaming without killing its DVD revenue.
Why it matters: Creates asymmetric pressure; the old guard is paralyzed.

2. Scale Economies

What it is: Unit costs drop as volume increases.
Example: Amazon, Costco. Bigger = cheaper = stronger moat.
Why it matters: Hard to compete if you can’t match their cost base.

3. Switching Costs

What it is: Customers stick around because switching is painful.
Example: Adobe Creative Cloud, Microsoft Office, Salesforce.
Why it matters: High retention = stable cash flows = compounding machine.

4. Network Effects

What it is: The product gets better as more people use it.
Example: Meta, Visa, LinkedIn.
Why it matters: Leads to dominance, creates a feedback loop of growth.

5. Branding

What it is: Emotional or symbolic value, not just functional.
Example: L’Oréal, Hermès, Apple.
Why it matters: Lets companies charge premium prices and keeps customers loyal even if alternatives exist.

6. Cornered Resource

What it is: Exclusive access to a critical asset — talent, IP, data, supply.
Example: ASML (EUV tech), Novo Nordisk (Ozempic IP), Ferrari (brand + heritage + team).
Why it matters: If no one else can get it, you win.

7. Process Power

What it is: Unique internal processes that drive efficiency, innovation, or quality — and are hard to copy.
Example: Toyota (lean manufacturing), Amazon (logistics, culture of innovation).
Why it matters: Long-lasting edge baked into the org’s DNA.

If I had to chose one, Network effects would be the most important one for me.

Here are my current holdings:

3 Commentaires

Carlos@market_maverick_2062

1Mo

Nice, but if I were you I would go down to st leats 10 picks so you can research them fully, and build conviction for your “for ever picks”.

Also, I think you are missing TESLA in there… ;)

Good luck my friend

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wealth.builder101

@wealth_builder101

3Mo·

My portfolio strategy (part 2)

Concentrate on the following sectors: Tech, consumer, healthcare, financial (excluding banks), industrials
Smallest position size 2% / largest position size 15%
Only sell a position when it can be replaced with a position that increases the overall quality of the portfolio
Avoid companies with little to no track record or companies going through a restructuring phase

Here are my current holdings: