Cadence Design Systems Goldman Sachs Communacopia + Technology Conference 2026

Thank you. Great to be here.

Yeah. Thank you for the question. The customer environment is probably the strongest I have seen it. Because last few years, of course, some companies were doing phenomenally well, the big AI companies or the hyperscalers, but some of them were not. But if you look at in 2026, universally, the industry is doing great. The semi companies are doing great, and then all the system companies, hyperscalers. The commitment to silicon is the strongest that I have seen. Because sometimes we used to get questions a few years ago, "Well, will all these hyperscalers really do chips or not?" But you can see now the success of. I think that what I would say at the highest level is the environment is good, and we always try to check how long this party going to last, but looks like party's only getting started.

I talk to all the people. They're very confident next few years. That's number one. Number two, I think our products are performing great. Of course, we are in the tech business, so best product always wins, and our competitive position is very strong. That's second. Third, we have this new TAM opportunity, new expansion of agentic AI on top of our traditional offerings. So that's all new TAM for us. If you put it all together, these three things are what is driving this growth, that you are seeing.

Yeah, I have been only saying this for five years now, I think, the cake, and people say, "What?" First of all things have to have three things. Answer to life is E, the universal constant. This is what my advisor used to say, is 2.7. Because if it is less than three, it is too little, and if it is more than three, nobody remembers anything.

Yeah. Pi is slightly more, 3.1. So whether it is 2.7 or 3.1, you can choose your favorite universal constant. I think three, and the reason I call it a cake, you could call it a stack if you want, or the reason I call it a cake is because if you eat a cake, unless you are a two-year-old, you eat all the layers together, and you have to bake all of them together, means they interact with each other. So that is the reason to call it a cake. And the reason I put AI at the top and compute at the bottom, you can put it in because, first of all, the middle layer is super critical, and this is going to happen in all. By the way, it is going to happen in all markets, not just EDA or not just chip design.

You have to ground the AI with physics, especially in these kind of complicated engineering software or engineering workflows. In some cases, the middle layer may not exist or is maybe simple, but definitely in our business, you need to ground the AI with the physics and then, of course, run it on compute and data. So all three are critical. And the real value will accrue to the vertical application, not the horizontal. Because in the beginning, it is always horizontal. In the end, it is always vertical. Waymo is a vertical application, for example. So they have a AI model. Do you know what model it is? It does not matter. It is can you get from point A to point B? They, of course, have control theory navigation, and then they have the silicon, just to give an example. And same thing will happen in chip design.

The reason I put agents in the top is because agents are very good at directional kind of orchestration. If you want to go from here to Palo Alto, that's directional thing. But actual navigation and detail, they are not as good. But they're great for orchestration, planning, optimization. So that's why the top layer calls the middle layer that sits on the compute layer.