(Reuters) - Cadence Design (NASDAQ:CDNS) Systems Inc on Monday raised its full-year revenue forecast slightly above Wall Street estimates, as a surge in artificial intelligence (AI) innovation fueled demand for custom semiconductor design.
Demand for the software used to design chips has risen even amid a cyclical downturn for the industry as chipmakers and tech giants like Alphabet (NASDAQ:GOOGL) and Apple (NASDAQ:AAPL) rush to create their own semiconductors needed for AI processing.
Chip designers such as Nvidia, Arm and Advanced Micro Devices (NASDAQ:AMD) also use Cadence's design tools to develop semiconductors used in handheld devices and servers that process data for AI.
Cadence forecast full-year revenue between $4.05 billion and $4.09 billion, largely above analysts' average estimate of $4.06 billion, according to Refinitiv data. The company's earlier estimate was for $4.03 billion to $4.07 billion.
Revenue stood at $976.6 million for the quarter ended June 30, above estimates of $974.9 million.
It expects adjusted earnings per share for 2023 between $5.05 and $5.11, beating expectations of $5.03 per share.
The San Jose, California-based company's shares fell about 4% in after-market trading.