Cadence Design Stock Drops as Outlook Disappoints Investors

Cadence Design Systems shares are heading lower in late trading after the provider of chip design software provided disappointing financial guidance for the first quarter. Cadence shares—like those of chief rival Synopsys—have been on the rise in recent months, buoyed by a view that semiconductor design software tools would get a boost from the aggressive growth in the market for chips targeted at artificial intelligence software workloads. Profits on an adjusted basis were $1.38 a share, above the guidance range of $1.30 to $1.36 a share, and ahead of consensus at $1.34 a share.