Synopsys Shares Plunge 35% Amid U.S.-China Trade Tensions, Erasing 2025 Gains

Synopsys Inc. suffered its worst single-day decline on record, with shares plummeting nearly 35% after reporting weaker-than-expected quarterly results. The chip design software company now risks wiping out all its 2025 gains as U.S.-China trade tensions continue to disrupt its intellectual property business.

Third-quarter revenue of $1.74 billion fell short of analyst estimates, according to LSEG data. CEO Sassine Ghazi pointed to U.S. export restrictions on advanced chip design software to China and challenges with a major foundry customer as primary culprits. While the restrictions were lifted in July, the damage appears lasting—Chinese customers' spending appetite remains subdued amid shaken confidence.

The selloff highlights how geopolitical friction can rapidly unravel growth for tech firms dependent on cross-border collaboration. With China accounting for over 10% of industry revenues, Synopsys' crash serves as a cautionary tale for semiconductor-adjacent businesses navigating fractured supply chains.