Cadence Design Systems Stock Down 8.3% Amid Synopsys' Q4 Earnings Miss

Cadence Design Systems (CDNS) shares fell 8.3% after Synopsys reported disappointing quarterly results and cited business headwinds. Synopsys missed revenue estimates and lowered its full-year outlook, citing US-China tensions. Investors grew wary of wider risks, leading to a sell-off in peer companies. The drop in Cadence's stock reflects investor concern that issues impacting Synopsys could be indicative of a slowdown for the entire industry.

Synopsys, Inc. (SNPS) reported weaker-than-expected third-quarter results, with shares plummeting by nearly 35% on Wednesday, September 9, 2025. The chip design software provider's stock performance was significantly impacted by a combination of factors, including US-China trade tensions and challenges in its intellectual property (IP) business.

The company's revenue for the quarter ended July 31, 2025, stood at $1.74 billion, falling short of analysts' estimates. This underperformance was primarily attributed to export restrictions on chip design software to China, which cut off a significant portion of its market. The restrictions, imposed in late May and lifted in July, disrupted business operations and led to a slowdown in sales Synopsys set to wipe out 2025 gains as shares tank on China business woes^[1].

CEO Sassine Ghazi attributed the revenue shortfall to "new export restrictions disrupting design starts in China, compounding China weakness" and challenges at a major foundry customer. The company also cited a push to develop its own IP, which did not yield the desired results Synopsys Plunges After Trade War Weighs on Its Chinese Sales^[2].

Synopsys lowered its full-year adjusted earnings per share (EPS) guidance, reflecting the impact of these challenges. The revised guidance for fiscal 2025 now ranges from $12.76 to $12.80, down from the previously estimated range of $15.11 to $15.19 Synopsys Posts Downbeat Results, Joins Nio And Other Big Stocks Moving Lower In Wednesday's Pre-Market Session^[3].

The disappointing results from Synopsys had a ripple effect on its peer, Cadence Design Systems, Inc. (CDNS), with shares falling by 8.3%. Investors grew wary of the potential for a broader industry slowdown, as issues impacting Synopsys could be indicative of challenges for the entire semiconductor software sector. Both companies are major providers of software and services used to design electronic components, and have been subject to US government actions aimed at limiting Chinese access to advanced semiconductors Synopsys Plunges After Trade War Weighs on Its Chinese Sales^[2].

The sell-off in Synopsys and Cadence shares reflects investor concern over the impact of US-China tensions on the semiconductor industry. The trade war has led to export restrictions and tariff uncertainty, posing significant challenges for companies operating in this space. As the situation evolves, investors will continue to monitor the financial performance and guidance of these key players in the semiconductor industry.