Shares of Cadence Design Systems and Synopsys rose Thursday after the U.S. lifted recently imposed export restrictions on electronic design automation tools to China. Cadence stock broke out on the news.
The Bureau of Industry and Security of the U.S. Department of Commerce late Wednesday informed Cadence, Synopsys and Siemens that they can resume providing their EDA tools and technology to Chinese customers. The U.S. had imposed the export license requirements on chip design software and hardware on May 29.
"This development removes a key overhang related to China" for Cadence and Synopsys, Mizuho Securities analyst Siti Panigrahi said in client note. "We expect only a one-month revenue impact for SNPS and CDNS in the current quarter."
Further, the news removes a roadblock for Synopsys to close its $35 billion acquisition of Ansys, Panigrahi said. That deal was announced in January 2024.
On the stock market today, Cadence stock jumped 5.1% to close at 326.81. With the advance, Cadence stock hit a buy point of 326.19 out of a 30-week consolidation pattern, according to IBD MarketSurge charts.
Meanwhile, Synopsys stock surged 4.9% to close at 548.74.
Cadence Stock Is On Two IBD Lists
U.S. shares of German industrial conglomerate Siemens climbed a fraction to end the shortened trading day at 129.80.
The rollback of export curbs on EDA software and other technology was part of a trade deal between the U.S. and China, the Wall Street Journal reported. For its part, China agreed to speed up export approvals for critical rare-earth minerals.
Cadence stock is on two IBD lists: Long-Term Leaders and Tech Leaders.
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