Shares of Synopsys (SNPS, Financial) and Cadence Design Systems (CDNS) soared following the U.S. government's decision to lift export restrictions on chip design software. This move alleviates uncertainties surrounding market access in this critical sector. The export restrictions, announced in May, had cut off over 10% of revenue for major companies in the industry, leading to downgraded forecasts and declining stock prices.
Analysts from Mizuho noted that the resumption of exports means both companies will only lose one month's revenue this quarter. Additionally, the easing of trade tensions could facilitate the approval of Synopsys's $3.5 billion acquisition of engineering software firm Ansys, a deal that has been pending for some time.
Synopsys's stock rose by 5.5% after previously withdrawing its earnings forecast due to the export restrictions. The company is still assessing the financial impact of these restrictions. Cadence Design Systems saw its stock climb 6.1%, reaching a record high of $330.09. Ansys's stock also increased by about 3.5%, while Siemens, the third-largest player in electronic design automation tools, gained 1.5% in the Frankfurt stock market.
