Why Cadence Design Systems, Inc. (CDNS) Went Down On Wednesday

We recently published a list of 10 Stocks Crash Harder Than Wall Street. In this article, we are going to take a look at where Cadence Design Systems, Inc. (NASDAQ:CDNS) stands against other worst-performing stocks.

Cadence Design dropped its share prices by 10.67 percent on Wednesday to finish at $288.61 apiece as reports that it was ordered by the US government to stop selling their software to China weighed down on investor sentiment.

According to a report by the Financial Times, the Commerce Department instructed Cadence, alongside competitors Synopsis and Siemens EDA, to stop selling their designs to China. Synopsis, however, denied the report, saying it had not received any word from the government.

The Chinese market was Cadence Design Systems, Inc.’s (NASDAQ:CDNS) fourth-largest market in terms of revenue mix, accounting for 11 percent of its revenues during the first quarter of the year.

Americas remained the largest with 48 percent, followed by other Asian countries with 19 percent, and the EMEA (Europe, Middle East, and Africa) at 16 percent.

If reports are true, the directive could significantly hurt the company’s profits and margins in the future.

Overall, CDNS ranks 6th on our list of worst-performing stocks. While we acknowledge the potential of CDNS our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than CDNS and that has 10,000x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.