Cadence Design Systems (CDNS) shares plummeted 5.23% in pre-market trading on Tuesday, following the company's fourth-quarter profit forecast that fell short of market expectations. The electronic systems design company's outlook has raised concerns about the impact of ongoing Sino-U.S. trade tensions on demand for its chip design software, particularly from the key market of China.

Despite reporting strong third-quarter results, with revenue of $1.34 billion beating estimates of $1.32 billion, investors seemed to focus on the company's conservative guidance for the upcoming quarter. The disappointing forecast overshadowed Cadence's otherwise solid performance, including sharply higher bookings and backlog.

Analysts have responded to the news with mixed sentiments. While some have raised their price targets, citing Cadence's investment in 3D solvers and the potential for growth as demand for advanced chip design accelerates, others remain cautious about the company's near-term prospects. J.P. Morgan, maintaining an "overweight" stance on the stock, raised its price target to $405 from $390, emphasizing the company's expanding addressable market and potential benefits from a shift toward more cyclically exposed names.