CADENCE DESIGN SYSTEMS, INC. vs ALPHABET INC., two Software stocks. A side-by-side on valuation, growth, margins, returns, and what each price is betting.
Cadence sells the design tools that chip engineers cannot work without, a narrow toll on semiconductor development, while Alphabet runs a global advertising and cloud machine that monetizes attention and compute at planetary scale. The mechanics show in the returns: Alphabet earns about 24% on equity and 16% on assets to Cadence's 18% and 10%, the larger and more diversified base still earning more on each dollar. Yet the market pays up sharply for the smaller specialist, roughly 90 times trailing earnings for Cadence against Alphabet's 38, betting that an entrenched, debt-free niche compounds more reliably than the ad giant's breadth. Alphabet carries light leverage at 0.17 turns and pays a token 0.23% dividend, where Cadence carries none and pays nothing, and the two convert a similar slice of price into free cash, about 1.5% each. The toll on chip design wears the higher multiple; the advertising platform does the heavier compounding.
Comparison updated 2026-06-15.
| Metric | CDNS | GOOGL |
|---|---|---|
| Price | $384.25 | $357.17 |
| Market cap | $105.2B | $4.37T |
| Sector | Software | Software |
| Stage | Mature | Mature |
| P/E | 89.6 | 27.2 |
| P/B | 16.03 | 9.13 |
| P/S | 19.02 | 10.35 |
| EV/EBITDA | 63.0 | 29.9 |
| Revenue growth | +13.8% | +17.4% |
| Operating margin | 29.3% | 36.1% |
| Net margin | 21.2% | 27.1% |
| Return on equity | 17.9% | 23.9% |
| Return on assets | 9.7% | 16.3% |
| Return on invested capital | 18.7% | 20.0% |
| FCF yield | 1.4% | 1.5% |
| Dividend yield | — | 0.2% |
| Debt / equity | 0.00 | 0.17 |
| Current ratio | 1.47 | 1.92 |
| Altman Z (solvency) | 7.54 | 7.72 |
| Piotroski F (quality) | 6 / 9 | 4 / 9 |
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The stronger value is highlighted per metric where one is strictly better on that single number; it is not an overall verdict on either company. For informational and research purposes only. Not investment advice. Not a recommendation to buy, sell, or hold any security. boothcheck is not a registered investment adviser. Past performance does not guarantee future results.