What Did It Take To Hold Cadence Stock?
A $10,000 investment in Cadence Design Systems (CDNS) stock grew to about $129,800 over the last ten years, before dividends. That same capital in the S&P 500 reached about $36,500. Looking back, the obvious question is whether investors should have bought the shares. The harder question is whether they could have held them. How many times do you think Cadence stock fell 20% or more along the way?
How Often Did Cadence Stock Fall?
Over the last ten years, Cadence stock fell 20% or more from a closing high seven times. Three of those declines reached 30% or more. The table below compares each drop to the performance of the S&P 500.
| High | Low | Cadence Design Systems stock | S&P 500, same dates | Back above the old high |
|---|---|---|---|---|
| Jan 2018 | Apr 2018 | -22% | -10% | Jul 2018 |
| Feb 2020 | Mar 2020 | -32% | -29% | Apr 2020 |
| Dec 2021 | Feb 2022 | -30% | -9% | Aug 2022 |
| Aug 2022 | Nov 2022 | -26% | -12% | Feb 2023 |
| Jun 2024 | Apr 2025 | -29% | -9% | Jul 2025 |
| Sep 2025 | Apr 2026 | -29% | 2% | May 2026 |
| Jun 2026 | Sep 2026 | -34% | -0% | Not yet |
Falls of 20% or more from a closing high, Oct 2016 to Oct 2026. Split-adjusted closing prices, dividends excluded.
The deepest decline is the one shareholders are navigating now. Cadence stock fell 34% from early June to mid-September 2026, while the S&P 500 slipped 0.3%. The longest recovery period occurred earlier. Following its June 2024 high, the stock spent 13 months trading below that price.
What Was It Like Holding Cadence Through A Fall?
Consider the experience of holding Cadence at its early June 2026 peak. Less than two weeks prior, the stock had finally closed back above its September 2025 high, ending a decline that lasted more than six months. The shares then reversed course, dropping for more than three months until reaching a mid-September low. Cadence stock has not closed above its June high since.
The six previous declines all ended with Cadence returning above its prior highs. Yet investors watching this summer’s slide had no way to predict where the price would settle.
Was Something Wrong With Cadence’s Business?
No. Cadence’s twelve-month revenue rose 5.6% between the June high and the September low, and its operating margin stayed near 31%. During the preceding drop from September 2025 to April 2026, twelve-month revenue increased 7.8% while the margin barely moved.
The bulk of that revenue comes from software used to design chips. Cadence reports this segment as Core Electronic Design Automation, representing 70% of fiscal 2025 revenue. The business continued growing through the latest fall. During its July call, management reported second-quarter revenue up 24% from a year earlier, alongside a record backlog.
The underlying business remained sound during both declines. The stock dropped anyway, an unavoidable reality for long-term shareholders.
What Selling Cadence Stock Would Have Cost
Cadence stock has risen 22% since its September low. Investors who sold at the bottom missed that entire recovery. Even with the recent gains, the stock remains about 20% below its June high.
The seven sharp declines were the cost of achieving the ten-year gain. If Cadence stock falls hard again, the critical metric to monitor is whether its twelve-month revenue continues rising, just as it did through the last two downturns.
Does This Mean You Should Act On CDNS?
Our purpose is to inform you with unique data so you make the right investment decisions. That said, betting on a single stock is always risky, no matter which direction you choose.
There is a smarter approach. Since its inception, the Trefis High Quality (HQ) Portfolio has returned 105%, beating the benchmark that combines the three major indices – the S&P 500, S&P Mid-cap, and Russell 2000. And it did so without taking the concentrated risk that comes with do-it-yourself stock picking. If that is how you want to invest, the HQ Portfolio is the place to start.