Cadence Design Systems Slips 11.94% in Two Days, Ranks 29th in Trading Volume Amid U.S. Export Control Concerns

On May 29, 2025, Cadence Design Systems (CDNS) experienced a decline of 1.42%, marking its second consecutive day of losses, with a total decrease of 11.94% over the past two days. The company's trading volume reached 18.00 billion, placing it 29th in the day's market rankings.

Cadence Design Systems is facing new export control regulations from the U.S. government, which may impact its business operations in China. The company is currently seeking clarification from the Bureau of Industry and Security (BIS) regarding these new regulations. The U.S. Commerce Department has taken steps to limit American companies from providing certain software technologies to China, specifically targeting companies like Cadence. This move is part of a broader effort by the U.S. government to regulate the flow of sensitive technology and maintain control over strategic industries.

In its latest earnings report, Cadence Design Systems reported a 23% year-over-year revenue growth and a 34% increase in non-GAAP EPS for Q1 2025, exceeding guidance on all key financial metrics. The company raised its financial outlook for 2025, reflecting confidence in continued business strength and resilience. Cadence's IP business grew 40% year-over-year in Q1, driven by strong market opportunities in AI, chiplet-based architectures, and the foundry ecosystem. The company expanded its partnerships with major industry players like NVIDIA, Intel, and Rapidus, enhancing its ecosystem and market reach. Cadence was recognized as one of the 100 best companies to work for by Fortune and Great Place to Work, highlighting its strong corporate culture.

Despite strong performance, Cadence remains cautious about its China business, maintaining a flat revenue outlook for the region due to macroeconomic uncertainties. The company faces potential risks from export control regulations and tariffs, although it currently reports no significant impact on its operations. Cadence's hardware revenue is limited by production capacity, with demand outstripping supply, which could constrain growth in this segment. The acquisition of Arm's Artisan Foundation IP business has not yet closed and is not included in the current guidance, adding uncertainty to future financial projections. The company acknowledges the dynamic macro environment and continues to monitor potential impacts on customer behavior and market conditions.