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Kimi K3 hits EDA software share price, but don't worry too much, Siemens positive rating unchanged (Citi)

2026-07-22·ima-daily5min-0722-18-04cefe187d

Street Signal | Kimi K3 hits EDA software share price, but don't worry too much, Siemens positive rating unchanged (Citi)

The Citi report pointed out that the Kimi K3 AI model uses open source tools to design semiconductor chips and bypasses traditional EDA software, causing the stock price of EDA software suppliers to fall. However, this breakthrough is based on mature chip technology and has no immediate impact.

Citi believes that EDA software is deeply embedded in customer design, verification, and simulation processes. As the complexity of chips increases, it will penetrate deeper into customer workflows. AI will use EDA tools instead of replacing them. Siemens' EDA business has a market share of about 15% and revenue of about 2.1 billion euros.

The current valuation is relatively high compared to its peers, and there is a SOTP discount, which does not fully reflect the valuation of the EDA business. The report maintains a positive rating for Siemens with a target share price of 335 euros. The market's concerns about Kimi K3 may be excessive.

Citigroup believes that AI is regarded as a complement to EDA tools rather than a substitute. Siemens's valuation discount is an opportunity that is currently underappreciated. One-sentence conclusion: The Kimi K3 model has triggered market concerns about EDA software being replaced, but Citigroup believes that the short-term impact will be limited.

AI will supplement rather than replace EDA. Siemens has investment value due to its discounted valuation and its EDA business that is not fully understood. Positive/negative: Positive for Siemens (SIEGn.DE). The market's panic about EDA being replaced is temporary.

Siemens' strong industrial software ecosystem and discounted valuation provide good buying opportunities. Catalysts:

1) The subsequent progress and commercialization of Kimi K3 designed chips;

2) Siemens’ Q3 financial report, verifying the growth of the EDA business;

3) The market’s confidence in the long-term prospects of the EDA industry is restored.

Full text

Kimi K3 hits EDA software share price, but don't worry too much, Siemens positive rating unchanged (Citi)

The Citi report pointed out that the Kimi K3 AI model uses open source tools to design semiconductor chips and bypasses traditional EDA software, causing the stock price of EDA software suppliers to fall. However, this breakthrough is based on mature chip technology and has no immediate impact. Citi believes that EDA software is deeply embedded in customer design, verification, and simulation processes. As the complexity of chips increases, it will penetrate deeper into customer workflows. AI will use EDA tools instead of replacing them. Siemens' EDA business has a market share of about 15% and revenue of about 2.1 billion euros. The current valuation is relatively high compared to its peers, and there is a SOTP discount, which does not fully reflect the valuation of the EDA business. The report maintains a positive rating for Siemens with a target share price of 335 euros. The market's concerns about Kimi K3 may be excessive. Citigroup believes that AI is regarded as a complement to EDA tools rather than a substitute. Siemens's valuation discount is an opportunity that is currently underappreciated. One-sentence conclusion: The Kimi K3 model has triggered market concerns about EDA software being replaced, but Citigroup believes that the short-term impact will be limited. AI will supplement rather than replace EDA. Siemens has investment value due to its discounted valuation and its EDA business that is not fully understood. Positive/negative: Positive for Siemens (SIEGn.DE). The market's panic about EDA being replaced is temporary. Siemens' strong industrial software ecosystem and discounted valuation provide good buying opportunities. Catalysts: 1) The subsequent progress and commercialization of Kimi K3 designed chips; 2) Siemens’ Q3 financial report, verifying the growth of the EDA business; 3) The market’s confidence in the long-term prospects of the EDA industry is restored.

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