A shortage in labor supply for designers of electronic demand automation (EDA) chips presents an opportunity for two stocks in particular, according to Goldman Sachs research. Cadence Design Systems and Synopsys are two of the largest manufacturers of chip design software, which helps to map billions of microscopic transistors onto a surface area of just a few millimeters. The pair represent “defensive, stable growers at best and… victims of AI disruption at worst”, Goldman analysts wrote in a Monday note. But a structural shortage in labor supply across the semiconductor industry means the firms could be uniquely placed to grow EDA revenues. “Our analysis suggests the shift toward custom AI silicon has exacerbated a structural shortage of chip design engineers that EDA companies are uniquely positioned to monetize with Agentic AI – an incremental opportunity we estimate at ~$3.7 billion per year by 2030,” the analysts wrote. “This is not reflected in Street estimates and may start to be evident as early as the second half of 2026.” As a result, Goldman has upgraded its target for CDNS shares to $470 from $410, representing a 26% upside. CDNS shares closed on Friday at $384.17. Goldman’s 12-month target price for SNPS is $600, but its analysts highlighted potential downside risks including export restrictions, market share losses and fewer custom chip designs. Memory sector under scrutiny Memory chips are a key component of consumer electronics devices such as smartphones and laptops. They have also become a critical component in artificial intelligence data centers and the servers that are installed in these facilities. There is particularly significant demand for high-bandwidth memory, leading to a sharp increase in prices. But the sector has experienced heavy volatility in recent weeks as questions begin to emerge about the sustainability of AI demand. In interviews with CNBC’s Arjun Kharpal last week, several AI executives poured cold water over the idea that demand is slowing, even as they acknowledged that businesses are being more cautious on the cost of using AI. “I somewhat think of AI demand as almost unlimited,” Pat Gelsinger, the former Intel CEO and now general partner at Playground Global, told CNBC on Wednesday, adding that energy availability is “the only real limiter.” “Because how much economic value do you get for increased intelligence? Almost infinite across every industry imaginable,” Gelsinger added. Elsewhere in the industry, Taiwan Semiconductor Manufacturing Co . reported a 67.9% year-on-year rise in its June sales on Monday, ahead of its second-quarter earnings release later this week. For the first half of 2026, TSMC’s total revenue reached 2.4 trillion new Taiwan dollars ($74.99 billion), representing a 35.6% increase compared to the same period in 2025. TSMC reported June revenue of NT$ 442.68 billion — a 6.2% increase from the previous month. The Taiwanese chip giant’s shares rose 1% Monday. — CNBC’s Arjun Kharpal, Michael Bloom and Jenny Lee also contributed to this report.
Goldman Sachs picks two stocks that could benefit from a chip designer shortage