u/confusedp

Author argues Cadence is undervalued relative to recent prices because the market wrongly fears AI will replace EDA; the durable moat is decades of validated flows, foundry certification, and the huge cost of a failed leading-edge chip, which makes switching to unproven AI software irrational. The revenue at risk from AI is only the low-end hobbyist segment, which is negligible for Cadence and Synopsys. No catalyst or timeframe is provided; the main risk is a faster-than-expected AI disruption, which the author considers unlikely.

Author argues Synopsys is undervalued relative to recent prices because the AI-replaces-EDA narrative is flawed; the real product is silicon-validated flows and foundry partnerships, not just code, and the high cost of chip failure makes customers unlikely to switch to unproven AI tools. The AI threat mainly hits low-end hobbyist/student use, which contributes little revenue, while China's well-funded efforts have failed to break the duopoly. No specific catalyst or timeframe is given; main risk is that a sufficient AI solution could eventually disrupt the business, though the author disputes this.