Key Highlights

● Synopsys closed at $422.48 on October 22 as chip-design software tracked semiconductors.

● Cadence Design Systems, its main rival, also fell and closed at $309.65.

● Synopsys sells electronic design automation software and intellectual property to chipmakers.

● Other software names such as Salesforce, Adobe and Workday rebounded.

Synopsys (NASDAQ:SNPS) slid on Thursday, October 22, 2026, closing at $422.48 as chip-design software moved with the semiconductor slump on the S&P 500. No company-specific news was found. The shares tracked the broad selloff in chip stocks.

Synopsys sells electronic design automation software and intellectual property that chipmakers use to design and verify new chips. Because its customers are semiconductor companies, its shares often trade with the chip sector, even though it is a software business.

Rival Cadence fell too

Synopsys was not alone. Cadence Design Systems (NASDAQ:CDNS), its main rival in chip-design software, also fell and closed at $309.65, again with no company-specific news found.

The move stood out because many other software stocks gained on Thursday. Some beaten-down software names such as Salesforce (NYSE:CRM), Adobe (NASDAQ:ADBE) and Workday (NASDAQ:WDAY) rebounded, and cybersecurity stocks rose. Investors appeared to treat the chip-design pair as part of the semiconductor complex rather than as software havens.

Why chip stocks sank

The Philadelphia Semiconductor Index had its biggest one-day drop since June 23, according to market data. Two reports set the tone.

Lam Research (NASDAQ:LRCX), a chip-equipment maker, reported record revenue of $8.22 billion, but it guided December-quarter revenue to $8.6 billion, plus or minus $400 million, a midpoint slightly below consensus, and cited supply constraints. Lam's chief executive said clean-room and component constraints will "limit chip makers and equipment companies' ability to fully meet end demand" into 2027.

Meta Platforms (NASDAQ:META), meanwhile, narrowed its 2026 capital spending range to $135 billion to $145 billion and posted negative free cash flow of $2.12 billion, its first cash outflow in more than a decade, according to market data. That renewed questions about how the AI build-out will be funded.

Nvidia (NASDAQ:NVDA)'s chief executive added, "The demand of the capital is much greater than the availability of the capital." Nvidia was one of the biggest drags on the S&P 500, according to market reports.

Equipment makers KLA (NASDAQ:KLAC) and Applied Materials (NASDAQ:AMAT) tumbled on the Lam read-through. Intel (NASDAQ:INTC), AMD (NASDAQ:AMD), Sandisk (NASDAQ:SNDK) and Marvell (NASDAQ:MRVL) all fell sharply.

Market snapshot

The S&P 500 fell 93.74 points to 7,663.43, its worst day since July. The Nasdaq Composite lost 694.00 points to 26,008.86, its steepest drop since June 5, ending a seven-session winning streak. The Dow Jones Industrial Average edged up 11.89 points.

About two of every three S&P 500 stocks rose, according to market reports, as investors shifted into staples, health care, utilities and homebuilders. The 10-year Treasury yield fell back below a closely watched threshold for the first time since September 22.

Synopsys and Cadence Face a Split Verdict

Chip-sector earnings are the near-term test. Teradyne (NASDAQ:TER) reports on October 27, and Intel is scheduled for October 29, according to the earnings calendar. Their comments on supply and demand will shape sentiment toward chip-design software as well.

The hyperscalers report next week, with Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) on October 28 and Amazon (NASDAQ:AMZN) on October 29. The Federal Reserve announces its rate decision on October 28.

Investors will also watch whether software stocks keep diverging from chip stocks, and which side Synopsys and Cadence end up trading with.