NEW YORK, Feb 4, 2026, 14:16 ET — Regular session
Shares of Synopsys Inc (SNPS) dropped roughly 1.2% to $414.07 in afternoon trading Wednesday, following a steep decline Tuesday amid a widespread software sector selloff. So far today, the stock has fluctuated between $405.74 and $423.23.
The move is significant as traders are still bracing for tougher software margin outlooks, worried that new AI tools could lower entry barriers for competitors and squeeze established players. On Tuesday, Synopsys and Atlassian dropped roughly 8%, dragging the S&P 500 software and services index down 3.8%. The selloff followed Anthropic’s launch of a legal tool for its Claude chatbot—one of the flashpoints fueling disruption concerns. “We’re seeing a lot of software names … get hit,” said Art Hogan, chief market strategist at B. Riley Wealth. Reuters
Wednesday offered little relief. “Options flow remains overwhelmingly defensive,” said Chris Murphy, co-head of derivative strategy at Susquehanna Financial, noting traders are piling on downside bets instead of snapping up beaten-down stocks. Steve Sosnick, chief strategist at Interactive Brokers, pointed out that clients are shying away from buying dips in software, unlike in semiconductors and precious metals. Reuters
Synopsys sank 8.46% Tuesday to close at $419.14, marking its fourth day in a row of losses. Trading volume hit 5.1 million shares, more than double its 50-day average of roughly 2 million. The stock now sits about 36% below its 52-week peak of $651.73, reached on July 30.
Synopsys fell behind Cadence Design Systems in the chip-design software space, a key player in electronic design automation (EDA) that engineers rely on to design and test chips. On Wednesday afternoon, Cadence’s shares dipped roughly 0.2%, whereas the iShares Expanded Tech-Software Sector ETF (IGV) dropped around 2.6%.
The battered software sector showed mixed results: Adobe climbed roughly 3.6%, Salesforce edged up around 0.3%, and Atlassian gained close to 0.6%. This back-and-forth has traders hunting for the next earnings release to either reset expectations or validate the recent downgrades.
Synopsys provides essential EDA tools for designing and testing integrated circuits, along with semiconductor intellectual property (IP) — licensed components that chipmakers integrate into their designs. The company breaks down its results by Design Automation and Design IP segments, among others.
The tape can flip fast, either way. If investors conclude the disruption chatter is exaggerated or software spending holds up better than expected, these stocks could rebound sharply. Otherwise, even strong results might get hit hard as multiples come under strain.
Synopsys (SNPS) will release its first-quarter fiscal 2026 earnings after the market closes on Feb. 25. The company plans to host a conference call at 5 p.m. ET that day.
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