10 Most Profitable Software Stocks to Buy Right Now

8. Cadence Design Systems, Inc. (NASDAQ:CDNS)

Net Income (TTM): $1.17 billion

Number of Hedge Fund holdings: 66

As of June 30, Cadence Design Systems, Inc. (NASDAQ:CDNS) has a Buy rating from 85% of the analysts covering the stock, with the remaining 15% rating it Neutral. Among those bullish is Stifel, as the firm lifted the price target on the company to $432 from $395 and reaffirmed a Buy rating on June 9.

A testament to the company’s position at leading-edge process nodes is its Design Technology Co-Optimization collaboration with Intel Foundry. This multiyear project, targeting Intel 14A, enhances an already well-established relationship, the analyst highlighted. Stifel considers the announcement as highly positive for Cadence Design Systems, Inc. (NASDAQ:CDNS) due to the value of its agentic AI tools and Design IP offerings.

The company’s year-to-date performance remains strong, with its return exceeding the S&P 500’s by a solid 10.52%. Cadence Design Systems, Inc. (NASDAQ:CDNS) also maintains an impressive operating margin (ttm), return on equity (ttm), and quarterly earnings growth (yoy) of 29.70%, 20.66%, and 22.70%, respectively. No wonder CDNS is one of the most profitable software stocks to invest in.

Cadence Design Systems, Inc. (NASDAQ:CDNS) is a California-based provider of AI-enabled software, hardware, and silicon intellectual property solutions. The company’s core offerings include functional verification services, a parallel logic simulation platform, an enterprise emulation platform, and a prototyping platform for chip verification.