Synopsys (SNPS - Free Report) closed at $430.14 in the latest trading session, marking a +1.81% move from the prior day. The stock outperformed the S&P 500, which registered a daily loss of 0.52%. Meanwhile, the Dow lost 1.24%, and the Nasdaq, a tech-heavy index, lost 0.21%.
Shares of the maker of software used to test and develop chips witnessed a loss of 0.57% over the previous month, beating the performance of the Computer and Technology sector with its loss of 7.7%, and the S&P 500's loss of 1.21%.
Investors will be eagerly watching for the performance of Synopsys in its upcoming earnings disclosure. The company's upcoming EPS is projected at $4.12, signifying a 42.07% increase compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $2.56 billion, indicating a 13.38% increase compared to the same quarter of the previous year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $15.14 per share and revenue of $9.72 billion, indicating changes of +17.27% and +37.77%, respectively, compared to the previous year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Synopsys. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.1% higher. Currently, Synopsys is carrying a Zacks Rank of #1 (Strong Buy).
In terms of valuation, Synopsys is presently being traded at a Forward P/E ratio of 27.91. This indicates a premium in contrast to its industry's Forward P/E of 17.66.
Meanwhile, SNPS's PEG ratio is currently 1.25. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Computer - Software was holding an average PEG ratio of 1.49 at yesterday's closing price.
The Computer - Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 55, placing it within the top 23% of over 250 industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though?
Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Synopsys (SNPS - Free Report) .
Synopsys currently has an average brokerage recommendation (ABR) of 1.14, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 21 brokerage firms. An ABR of 1.14 approximates between Strong Buy and Buy.
Of the 21 recommendations that derive the current ABR, 19 are Strong Buy and one is Buy. Strong Buy and Buy respectively account for 90.5% and 4.8% of all recommendations.
Brokerage Recommendation Trends for SNPS
Check price target & stock forecast for Synopsys here>>>
While the ABR calls for buying Synopsys, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.
Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.
In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement.
With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near-term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision.
ABR Should Not Be Confused With Zacks RankIn spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures.
Broker recommendations are the sole basis for calculating the ABR, which is typically displayed in decimals (such as 1.28). The Zacks Rank, on the other hand, is a quantitative model designed to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide.
On the other hand, earnings estimate revisions are at the core of the Zacks Rank. And empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks.
Another key difference between the ABR and Zacks Rank is freshness. The ABR is not necessarily up-to-date when you look at it. But, since brokerage analysts keep revising their earnings estimates to account for a company's changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in indicating future price movements.
Should You Invest in SNPS?In terms of earnings estimate revisions for Synopsys, the Zacks Consensus Estimate for the current year has increased 0.1% over the past month to $15.14.
Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #1 (Strong Buy) for Synopsys. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, the Buy-equivalent ABR for Synopsys may serve as a useful guide for investors.
Synopsys builds the software that powers every chip designed for AI, and analysts are practically falling over each other to buy it. But the real question is whether the tailwinds behind this under-the-radar pick can push a modest investment into…
Shares of Synopsys (NASDAQ:SNPS | SNPS Price Prediction) recently changed hands at $466.88. So what could a $10,000 investment look like by 2030? Synopsys sells the software that chipmakers use to design their products.
One 24/7 Wall St. podcast host compared it to “the AutoCAD or the CAD of this industry”. As AI chips get more complex, that tools matters more, and that’s the reason to take a longer look at the stock.
What $10,000 Could Grow Into in the Base Case
The figures below use a five-year period ending October 15, 2031. That’s the projected period closest to 2030. The base case puts a $10,000 investment at about $20,481, a total return of 104.81%. That outcome depends on the stock climbing from a projected entry price of $467.11 to a per-share target of $956.68. The annualized return comes to 15.42%.
A quarterly path is also mapped out by the model, and one point on it falls in 2030. The base-case path reaches $899.95 on October 15, 2030, which would make a $10,000 investment worth about $19,266.34. Treat that 2030 figure as illustrative only. It’s a stop on the projected path.
Bull, Base, and Bear Scenarios for Your $10,000
Scenario
Target Share Price
Total Return
Value of $10,000
Bull
$1,148.19
145.81%
$24,581
Base
$956.68
104.81%
$20,481
Bear
$643
37.66%
$13,766
The projection’s signal reads buy, at 0.9 confidence, a projected output rather than advice. Over the closer one-year period, its base-case target is $598.21, an upside of 28.07%.
Wall Street analysts are also positive. Their consensus target is $572.17, with 4 strong buy, 19 buy, and 2 hold ratings and no sells.
Three Forces Behind the Upside
AI Is Making Chips Harder to Design
The more complex a chip, the more design software it takes to build it. In the fiscal third quarter, revenue rose 42.4% from a year earlier to $2.48 billion. Non-GAAP EPS came in at $3.91, beating the $3.67 consensus.
Management then raised its full-year guidance to non-GAAP EPS of $15.04 to $15.10 and said it expects double-digit growth in EDA, its core design-software business. Synopsys has now beaten earnings estimates 4 quarters in a row.
Ansys Adds Simulation, From Single Chips to Full Systems
Ansys adds simulation tools that reach beyond chips into automotive, aerospace, and industrial customers. The company expects Ansys to contribute about $2.98 billion of fiscal 2026 revenue. Chief executive Sassine Ghazi put it this way: “One year after the transformational acquisition of Ansys, we are executing with focus, extending our leadership and gaining momentum.”
Management has also pointed to a $400 million revenue-synergy opportunity in semiconductor multi-physics, with monetization expected to start in fiscal 2027.
New Ways to Get Paid
At last count, 20 customers were evaluating Synopsys’ agentic AI design tools. Ghazi described a pricing model that would move from “subscription license that our customer has for the human engineers” to “subscription plus consumption for the agents.”
If customers adopt it widely, that model could lift earnings per customer. Margins are already strong: the non-GAAP operating margin reached 41.6% last quarter.
Risks That Could Shrink Your Stake
The bear case still assumes gains, but nothing ensures them. Synopsys’ guidance assumes no further changes to U.S. export controls or Entity List restrictions, and new limits on China could reduce sales.
The company also carries about $10 billion of long-term debt from the Ansys deal, and it has planned restructuring charges for the fiscal fourth quarter. Additional risks come from a few large customers that account for a big share of sales, tough competition in EDA, and the chance that Ansys synergies fall short.
Expect a rough ride, too. The stock has a beta of 1.208, meaning it tends to swing more than the market overall. Shares fell 7.12% over the past week after climbing 22.4% over the past month, and they’re down 0.6% so far this year.
Valuation is another factor: the stock trades at about 87x trailing earnings and 23x forward earnings. If AI-related demand cools off, the share price could drop quickly.
Your $10,000 by 2030: A Range of Outcomes
Over the five-year projected period, a $10,000 stake in Synopsys ranges from about $13,766 in the bear case to $24,581 in the bull case, with the base case landing at $20,481.
To track the thesis, watch Ansys synergy progress, adoption of the AI agent tools, and any changes to export rules. The projection is not investment advice, and actual returns could be higher or lower than any scenario shown here.
Contact [email protected] for any questions or corrections.
Synopsys, Inc. (NASDAQ:SNPS – Get Free Report) CEO Sassine Ghazi sold 14,604 shares of the stock in a transaction on Thursday, October 15th. The shares were sold at an average price of $462.84, for a total value of $6,759,315.36. Following the sale, the chief executive officer directly owned 76,865 shares in the company, valued at $35,576,196.60. This trade represents a 15.97% decrease in their position. The sale was disclosed in a filing with the SEC, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan.
Sassine Ghazi also recently made the following trade(s):
On Tuesday, September 15th, Sassine Ghazi sold 14,604 shares of Synopsys stock. The stock was sold at an average price of $374.88, for a total value of $5,474,747.52. Synopsys Trading Down 2.9% SNPS opened at $454.63 on Friday. The company has a current ratio of 1.34, a quick ratio of 1.24 and a debt-to-equity ratio of 0.29. The firm has a market cap of $87.13 billion, a price-to-earnings ratio of 80.32, a PEG ratio of 1.85 and a beta of 1.21. Synopsys, Inc. has a 12 month low of $362.55 and a 12 month high of $539.48. The stock has a fifty day moving average price of $427.56 and a 200-day moving average price of $441.51.
Synopsys (NASDAQ:SNPS – Get Free Report) last issued its quarterly earnings data on Wednesday, August 26th. The semiconductor company reported $3.91 earnings per share for the quarter, beating analysts’ consensus estimates of $3.67 by $0.24. Synopsys had a return on equity of 6.24% and a net margin of 11.43%. The company had revenue of $2.48 billion for the quarter, compared to the consensus estimate of $2.44 billion. During the same quarter last year, the company earned $3.39 earnings per share. The firm’s revenue for the quarter was up 42.4% compared to the same quarter last year. Synopsys has set its Q4 2026 guidance at 4.100-4.160 EPS and its FY 2026 guidance at 15.040-15.100 EPS. As a group, equities research analysts anticipate that Synopsys, Inc. will post 10.97 earnings per share for the current fiscal year. Synopsys announced that its board has approved a stock buyback plan on Monday, October 5th that permits the company to repurchase $1.00 billion in shares. This buyback authorization permits the semiconductor company to buy up to 1.1% of its shares through open market purchases. Share buyback plans are generally an indication that the company’s management believes its shares are undervalued.
Analyst Ratings Changes SNPS has been the topic of a number of analyst reports. Deutsche Bank Aktiengesellschaft reaffirmed a “buy” rating and issued a $640.00 price objective (up from $590.00) on shares of Synopsys in a research report on Thursday, October 1st. UBS Group set a $570.00 target price on shares of Synopsys in a research report on Thursday, August 27th. KeyCorp increased their target price on shares of Synopsys from $600.00 to $605.00 and gave the company an “overweight” rating in a research report on Thursday, October 1st. Piper Sandler upgraded shares of Synopsys from a “neutral” rating to an “overweight” rating and raised their target price for the company from $450.00 to $550.00 in a research note on Tuesday, June 23rd. Finally, Needham & Company LLC lifted their price target on shares of Synopsys from $580.00 to $620.00 and gave the stock a “buy” rating in a report on Monday, October 12th. One equities research analyst has rated the stock with a Strong Buy rating, twenty-one have given a Buy rating and four have issued a Hold rating to the company’s stock. According to MarketBeat, Synopsys presently has a consensus rating of “Moderate Buy” and a consensus target price of $571.78.
Check Out Our Latest Stock Analysis on SNPS
Hedge Funds Weigh In On Synopsys Several hedge funds and other institutional investors have recently modified their holdings of SNPS. AGH Wealth Advisors LLC increased its stake in Synopsys by 4.4% during the 1st quarter. AGH Wealth Advisors LLC now owns 569 shares of the semiconductor company’s stock valued at $226,000 after purchasing an additional 24 shares in the last quarter. Elevation Wealth Partners LLC raised its holdings in shares of Synopsys by 96.4% in the second quarter. Elevation Wealth Partners LLC now owns 55 shares of the semiconductor company’s stock worth $25,000 after buying an additional 27 shares during the last quarter. Bar Harbor Wealth Management lifted its stake in shares of Synopsys by 0.7% during the first quarter. Bar Harbor Wealth Management now owns 4,181 shares of the semiconductor company’s stock worth $1,658,000 after buying an additional 31 shares during the period. Oak Grove Capital LLC lifted its stake in shares of Synopsys by 1.1% during the third quarter. Oak Grove Capital LLC now owns 2,898 shares of the semiconductor company’s stock worth $1,260,000 after buying an additional 32 shares during the period. Finally, Kintegral Advisory LLC lifted its stake in shares of Synopsys by 0.6% during the third quarter. Kintegral Advisory LLC now owns 5,812 shares of the semiconductor company’s stock worth $2,528,000 after buying an additional 32 shares during the period. 85.47% of the stock is owned by hedge funds and other institutional investors.
About Synopsys (Get Free Report)
Synopsys, Inc is an electronic design automation (EDA) and semiconductor intellectual property company serving the global semiconductor and electronics industries. Its software helps engineers design, verify, test and manufacture advanced integrated circuits and electronic systems.
The company’s products and services support digital and analog design, functional verification, design-for-test, manufacturing and semiconductor engineering workflows. Synopsys also provides reusable semiconductor IP, including processor cores, interface technologies, security solutions and other components used in system-on-chip designs.
In addition to its semiconductor design offerings, Synopsys provides software development and application security tools intended to help organizations identify and manage vulnerabilities and risks across the software development lifecycle.
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The S&P 500 has gained nearly 14.1% so far this year (as of Oct. 9). But much of the market's earnings growth remains concentrated in major technology companies.
According to London Stock Exchange Group (LSEG), S&P 500 earnings are expected to grow around 31% year over year in the third quarter. The global financial markets data and infrastructure provider also expects technology sector and prominent artificial intelligence (AI) players such as Alphabet, Amazon, and Meta Platforms to account for roughly two-thirds of that earnings growth.
Image source: Getty Images.
While the current focus is mainly on AI companies building computing capacity and infrastructure, I expect the next phase of AI adoption will benefit businesses generating measurable productivity gains from AI.
If I had to buy one stock today to benefit from this shift through 2030, it would be Synopsys (SNPS -3.17%). The company provides the software and intellectual property (IP) used to design increasingly complex chips and engineering systems.
The market's next winners may not build AI data centers The U.S. 10-year Treasury yield reached approximately 5.24% on Oct. 9. Morgan Stanley projects that AI infrastructure will need roughly $1.5 trillion in outside funding by 2028. With interest rates remaining elevated, the challenge for companies is not just expanding computing capacity but generating enough profits to justify the enormous investment.
SNPS Synopsys$464.71-$15.22 (-3.17%)
NASDAQ · As of 1:14 PM ET 10/15/26
Hence, I expect investors to increasingly reward companies that make AI computing more efficient and profitable by 2030. The demand for specialized processors, industrial automation, and AI-assisted engineering could accelerate as businesses focus on reducing costs and improving productivity.
While this trend could broaden earnings growth beyond today's dominant AI infrastructure suppliers, established leaders such as Nvidia and Amazon could continue benefiting from growing computing demand. Synopsys, on the other hand, stands to benefit from the increasing number and complexity of chip designs as companies develop computing solutions tailored to different applications.
Synopsys could capture more value from its customers The bigger opportunity for Synopsys lies in changing how it earns revenue. Synopsys earns licensing fees when customers use its IP in chip designs, with some agreements also generating royalties from chip sales.
In September 2026, Synopsys announced a multi-year licensing agreement worth more than $1 billion with Amazon for customized semiconductor IP for multiple generations of chips. The agreement's licensing value excludes potential royalties, which could provide Synopsys with additional revenue as Amazon's chip production increases.
Synopsys' $34.9 billion acquisition of Ansys could also help it generate more revenue from existing customers. Engineers designing advanced chips must account for how heat, electrical interference, and other physical factors affect performance. Synopsys has already launched products that bring these simulations into the chip-design process. Management expects the combination of new products and cross-selling to generate $400 million in additional annualized revenue by fiscal 2029.
The company's partnership with OpenAI could create another growth opportunity. The companies are developing a specialized model GPT-Synopsys to automate certain chip-design tasks. Synopsys' existing tools will help verify the results. The companies also plan to share revenue from the offering. However, Synopsys still needs to prove that increased use of AI-powered tools can offset any decline in demand for traditional software licenses.
Synopsys' ambitious 2030 financial targets Synopsys' reported revenue jumped 49.2% year-over-year over the first nine months of fiscal 2026. However, much of that growth came from its Ansys acquisition. Comparing revenue as if Ansys had been part of Synopsys in both years suggests growth of only about 7.4%. This is an approximate comparison, not the company's official organic growth rate.
The company's Design IP revenue declined 0.7% year-over-year over the first nine months of fiscal 2026. Yet, management is now targeting annual growth of at least 17% for the Design IP business from fiscal 2026 through fiscal 2030. Achieving that target would require a significant acceleration from its recent performance.
Management expects approximately $11.15 billion revenue in fiscal 2027. The company is also targeting 15% annual revenue growth from fiscal 2026 through fiscal 2030. If achieved, revenue could reach nearly $17 billion by fiscal 2030. The company's targeted 50% non-GAAP operating margin would translate into approximately $8.5 billion in adjusted operating income in fiscal 2030.
The cash-flow projections are equally important. Synopsys expects around $3.1 billion in free cash flow in fiscal 2027. The company is also targeting annual free cash flow growth in the mid-20% range from fiscal 2026 through fiscal 2030. Assuming 25% annual growth, free cash flow could nearly double to $6.1 billion by fiscal 2030. This would imply an improvement in free cash flow margin from around 28% in fiscal 2027 to 36% in fiscal 2030. Hence, achieving these projections would require not only higher revenue but also better cash generation from each dollar of sales.
Synopsys' valuation leaves little room for mistakes Synopsys shares were trading at approximately 27 times projected fiscal 2027 adjusted earnings and 61 times GAAP earnings (as of Oct.9). The lower adjusted PE multiple excludes expenses such as acquisition-related amortization and stock-based compensation.
The company expects around $960 million to $980 million in stock-based compensation in fiscal 2027, or around 31% to 32% of its projected $3.1 billion in free cash flow. Issuing shares to employees could dilute existing shareholders, while repurchasing shares to offset that dilution would consume cash.
Management is also targeting annual adjusted earnings growth in the mid-20% range through fiscal 2030. Assuming 25% annual growth from the midpoint of its fiscal 2027 EPS guidance of $19.08, adjusted EPS could reach approximately $37.27 by fiscal 2030.
However, at 20 times those earnings, the stock could reach approximately $745 by fiscal 2030, representing 46% upside. A lower multiple of 15 would imply just $559, or 10% upside. These scenarios show how valuation changes could limit shareholder returns despite strong earnings growth.
Hence, I would buy a modest position in Synopsys, while paying attention to accelerating underlying revenue growth, improving Design IP profitability, and higher free cash flow per share.
Electronic design automation (EDA) company Synopsys NASDAQ: SNPS is coming off one of its strongest stretches of 2026, with shares up 30% over the past month.
Synopsys Today
$466.65 -13.28 (-2.77%)
As of 01:37 PM Eastern
This is a fair market value price provided by Massive. Learn more.
$362.55▼
$539.4882.47
$571.78
The company’s recently announced deal with Amazon.com NASDAQ: AMZN and partnership with OpenAI were two key catalysts for the stock. After revealing these engagements, Synopsys’s management team substantially increased its long-term guidance, anticipating higher growth and greater margin expansion.
Get Synopsys alerts:
However, these are not the only developments worth taking notice of. Synopsys is also looking to return more capital to shareholders, recently announcing a $1 billion accelerated share repurchase (ASR) program.
This move not only signals confidence in its outlook, but also sends a particularly positive signal compared to many buyback programs.
Synopsys Initiates ASR Following Its Investor DayNot long after its Investor Day, where Synopsys updated its financial targets and provided details around its Amazon and OpenAI engagements, the company announced its $1 billion ASR. While large in absolute terms, the ASR is relatively small compared to Synopsys’s market capitalization near $92 billion, equal to a bit more than 1% of the company’s value. However, the accelerated aspect of the program makes the positive signal this move sends stronger.
Under the ASR, Synopsys receives initial delivery of approximately 1,735,000 shares. This immediately moves these shares from being outstanding to part of Synopsys’ treasury shares. From the company’s point of view, it can immediately lower its outstanding share count, helping improve share-based metrics like earnings per share (EPS). Synopsys' last reported outstanding share count was approximately 191.6 million.
By using an ASR, Synopsys signals that it wants to quickly lower its share count. This indicates that, longer-term, the company sees its share price moving higher. Under this assumption, using an ASR would be the more efficient method for lowering its share count. This comes as buying back shares at higher future prices would equate to less share count reduction for an equal cash outlay. Overall, using an ASR is a particularly notable signal because it suggests Synopsys sees a strong opportunity near recent prices.
More Share Count Reduction Could Be in Synopsys’ FutureSynopsys’ outstanding share count may fall by more or less than the 1,735,000 shares by the end of the ASR. This is because companies employ investment banks, in this case J.P. Morgan Chase & Co. NYSE: JPM, to execute the ASR. The company’s share count immediately falls by 1,735,000 because the bank immediately borrows shares in the market and delivers them to Synopsys. Then, over time, the bank purchases shares to close out its position.
The actual number of shares Synopsys will receive will be based on its average daily volume-weighted average share price (VWAP) during this repurchase period, less a discount it receives from the bank. The repurchase period extends through Jan. 5, 2027, at the latest, but can end earlier if J.P. Morgan completes it beforehand. Due to this, the higher Synopsys’ average daily VWAP is over this period, the fewer shares it will receive.
However, there is a reasonable chance that Synopsys will receive more than 1,735,000 shares. Off of $1 billion, 1,735,000 shares implies a price per share near $576, well above Synopsys’ current level near $480.
As an illustration, if Synopsys’s average daily VWAP during the repurchase period was $500, it would receive around 2 million shares. This would be around 15% more shares than the initial delivery, although the actual number would be slightly more after adjusting for the discount. In turn, Synopsys' stock could move significantly higher, and the company could still receive the 1,735,000 shares, or potentially more.
Analyst Price Targets Move Up Substantially After Synopsys’ Investor DayIn another positive sign, many Wall Street analysts became significantly more bullish on Synopsys stock following its Investor Day. Since then, MarketBeat has tracked several analysts who have increased their SNPS price targets by an average of approximately 10%.
Current Price$479.93High Forecast$640.00Average Forecast$571.78Low Forecast$475.00Synopsys Stock Forecast Details
The MarketBeat consensus price target for Synopsys is about $572, implying healthy upside. However, the average of price targets updated since the company’s Investor Day is moderately higher, near $586. The range among these updated targets is somewhat wide, with Deutsche Bank’s $640 target being the highest and BNP Paribas’s $475 target being the lowest. Notably, BNP Paribas’s target is the only target tracked by MarketBeat below $500, while around 10 are at or above $600. Meanwhile, SNPS has zero Sell ratings, four Hold ratings, and 22 Buy ratings.
Synopsys’ outlook has meaningfully improved, with the company indicating confidence through increased guidance and ASR, and it has solid analyst support. Importantly, Synopsys’ $1 billion application-optimized intellectual property revenue guidance by 2030 only includes deals it has already signed. Upside catalysts include Synopsys signing more deals similar to its over $1 billion agreement with Amazon, which provides IP for future generations of Amazon’s custom chips.
Should You Invest $1,000 in Synopsys Right Now?Before you consider Synopsys, you'll want to hear this.
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Key Takeaways Synopsys' Design IP revenues rose 11% year over year in fiscal Q3 2026, reaching 19.1% of total revenues.Synopsys' IP business targets doubling year over year, with more than 100 cumulative design wins.Automotive design-win rates exceeded 90% for 3 consecutive quarters as ADAS shifted to 5nm & 3nm technologies. Synopsys’ (SNPS - Free Report) Design IP includes logic libraries, embedded memories, wired interface IP, memory interface IP and security IP. In the third quarter of fiscal 2026, Design IP accounted for 19.1% of total revenues and increased 11% year over year, while the adjusted operating margin improved to 26.5%.
Synopsys holds a leading position in interface and foundation IP. The business is increasingly focused on areas benefiting from AI-driven semiconductor complexity. Synopsys said demand for high-speed interconnect IP is accelerating because of AI’s massive data requirements.
Synospys’ standards-based IP that can be developed once and licensed repeatedly across customers and applications is gaining traction. Its portfolio includes high-speed interface, memory and die-to-die connectivity IP, which are increasingly important as AI systems require higher bandwidth, faster data transfer and more complex chip architectures.
IP business is on track to double year over year, with cumulative design wins exceeding 100. In automotive, the company maintained a design-win rate above 90% for three consecutive quarters as advanced driver-assistance systems (ADAS) transitioned to 5-nanometer and 3-nanometer technologies. Its USB IP portfolio has also surpassed $2 billion in lifetime bookings.
SNPS’ also focuses on developing differentiated IP subsystems and enabling custom silicon solutions tailored to customers’ workloads and architectures. Hyperscalers, ASIC vendors, foundries and semiconductor companies are seeking deeper engineering collaboration to accelerate chip development through this model.
How Competitors Fare Against SNPSSynopsys operates in a highly competitive market, with major rivals, including Cadence Design Systems Inc. (CDNS - Free Report) and Keysight Technologies (KEYS - Free Report) . These companies serve different stages of the electronic and IC design lifecycle, offering specialized tools and solutions that help customers improve product development, design efficiency and testing.
Keysight Technologies competes primarily across electronic design, measurement and testing, with software and solutions covering areas such as electromagnetic analysis, circuit simulation and hardware verification. Meanwhile, Cadence Design Systems is benefiting from increasing design complexity and growing customer investments in AI-powered automation.
Cadence is also strengthening its position through its expanding Cadence.ai portfolio. New offerings, including AgentStack, ChipStack, ViraStack and InnoStack AI Super Agents, are broadening the company’s AI capabilities across the design workflow and could help Cadence maintain its momentum as AI adoption accelerates.
Synopsys Performance and ValuationSynopsys’ shares have appreciated 19.3% in the past month, outperforming the Zacks Computer and Technology sector’s return of 2.2%.
SNPS YTD Performance Chart
Image Source: Zacks Investment Research
The outperformance in the stock price led to a premium valuation, with SNPS stock trading at a P/S multiple of 8.44X, much above the industry P/E multiple of 6.37X. The premium valuation is further established by a Zacks Value Score of F.
The Zacks Consensus Estimate for SNPS’ fiscal 2026 earnings is pegged at $15.13, indicating 17% year-over-year growth. Estimates have been revised upward in the past 60 days.
Image Source: Zacks Investment Research
SNPS currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Synopsys (SNPS - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Shares of this maker of software used to test and develop chips have returned +26.8% over the past month versus the Zacks S&P 500 composite's +2.1% change. The Zacks Computer - Software industry, to which Synopsys belongs, has gained 3.9% over this period. Now the key question is: Where could the stock be headed in the near term?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Revisions to Earnings EstimatesRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current quarter, Synopsys is expected to post earnings of $4.10 per share, indicating a change of +41.4% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.5% over the last 30 days.
For the current fiscal year, the consensus earnings estimate of $15.13 points to a change of +17.2% from the prior year. Over the last 30 days, this estimate has changed -0.2%.
For the next fiscal year, the consensus earnings estimate of $18.26 indicates a change of +20.7% from what Synopsys is expected to report a year ago. Over the past month, the estimate has changed +4.8%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Synopsys is rated Zacks Rank #1 (Strong Buy).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
In the case of Synopsys, the consensus sales estimate of $2.56 billion for the current quarter points to a year-over-year change of +13.5%. The $9.72 billion and $11.14 billion estimates for the current and next fiscal years indicate changes of +37.8% and +14.6%, respectively.
Last Reported Results and Surprise HistorySynopsys reported revenues of $2.48 billion in the last reported quarter, representing a year-over-year change of +42.4%. EPS of $3.91 for the same period compares with $3.39 a year ago.
Compared to the Zacks Consensus Estimate of $2.44 billion, the reported revenues represent a surprise of +1.68%. The EPS surprise was +6.54%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Synopsys is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Synopsys. However, its Zacks Rank #1 does suggest that it may outperform the broader market in the near term.
Key Takeaways SNPS is expanding beyond chip design with Ansys, which contributed 28.7% of fiscal Q2 2026 revenue.Recurring sources accounted for 82% of SNPS' fiscal Q3 2026 revenues, and backlogs were $10.9 billion.SNPS is advancing AI-powered EDA, multiphysics solutions and NVIDIA's partnership supporting its growth. Synopsys, Inc. (SNPS - Free Report) shares have jumped 34.5% in the past month, outperforming the Zacks Computer - Software industry and the Zacks Computer and Technology sector’s appreciation of 7.5% and 5.2%, respectively.
SNPS YTD Performance Chart
Image Source: Zacks Investment Research
The outperformance in the stock price led to a premium valuation, with SNPS stock trading at a P/S multiple of 8.7x, much above the industry P/E multiple of 6.47x. The premium valuation is further established by the Zacks Value Score of F.
Given these dynamics, investors are wondering if it’s the right time to buy, sell or hold the stock. Let’s dive into the fundamentals and financials of the stock and discuss what investors should do with SNPS right now.
AI Infrastructure Demand is Driving SNPS’ GrowthSynopsys gains from AI infrastructure buildout, driving strong system-level and semiconductor R&D spending and robust AI compute design activity. Synopsys is embedding AI across its product portfolio to automate engineering workflows and improve customer productivity. Synopsys has expanded beyond its traditional silicon design business with the acquisition of Ansys, adding multi-physics simulation capabilities to its portfolio. Ansys contributed 28.7% of revenue in the second quarter of fiscal 2026.
While generative AI could disrupt software companies, Synopsys gains from decades of deep engineering expertise, proprietary codebases and solvers, silicon-proven design technologies and foundry co-optimization capabilities. The company has been able to provide its customers with up to 50% faster knowledge assistance, 70% faster workflow assistance and 5x faster formal testbench generation.
Synopsys generates most of its revenue from recurring sources, which accounted for 82% of total revenue in the third quarter of fiscal 2026. Much of this revenue comes from time-based products, maintenance and services that are recognized over the life of a contract rather than upfront, creating more stable and predictable results. The company’s backlog stood at roughly $10.9 billion and includes non-cancellable Flexible Spending Account commitments, where customers can choose the product mix later.
Synopsys’ partnership with NVIDIA is likely to open new avenues of growth for the company. In 2025, Synopsys issued about 4.8 million shares in a private placement with NVIDIA for $2 billion of net proceeds. The added capital increases financial flexibility at a time when the company is integrating Ansys and investing across EDA, IP and simulation. It also deepens alignment with a leading AI compute platform, which matters as Synopsys expands AI-driven EDA solutions and automation across the design flow.
Given these tailwinds, Synopsys has been experiencing robust growth in both top and bottom lines. The Zacks Consensus Estimate for SNPS’ fiscal 2026 earnings is pegged at $15.13, indicating 17.2% year-over-year growth. Estimates have remained unchanged over the past 30 days.
Image Source: Zacks Investment Research
SNPS Strengthens Its Competitive Edge in the EDA SpaceSynopsys faces competition from EDA vendors such as Cadence Design Systems Inc. (CDNS - Free Report) , Keysight Technologies (KEYS - Free Report) and Siemens (SIEGY - Free Report) . These companies offer products focused more on distinct phases of the IC design process and provide a range of services to companies throughout the world to help optimize their product development process, among other things.
Keysight Technologies competes in the electronic design and testing space, particularly providing software solutions for electromagnetic analysis, circuit simulation and hardware verification. Cadence benefits from higher design complexity and rising customer spend on AI-driven automation.
Amid rapid AI proliferation, the Cadence.ai portfolio has been gaining strength and new product launches like AgentStack, along with ChipStack, ViraStack and InnoStack AI Super Agents, are expected to aid in sustaining the momentum. Siemens EDA, which is Siemens' electronic design automation division, and Cadence Design Systems both provide EDA tools like software, hardware and services essential for designing chips and semiconductor devices.
However, SNPS is continuously improving its expertise in EDA with launches like the first Multiphysics Fusion solutions, combining AI-powered EDA tools with advanced multiphysics analysis to improve chip design accuracy, accelerate design closure and support AI and multi-die semiconductor development. Partnership with NVIDIA also positions SNPS higher than its competitors.
Conclusion: Buy SNPS Stock NowSynopsys is gaining from design wins, driven by a broad product portfolio. Growth in the hybrid working trend is driving demand for bandwidth. Broad demand for advanced chip design, verification and simulation tools, along with a more diversified portfolio following the Ansys acquisition, is benefiting the company. Backlog and a high mix of recurring revenue improve visibility, and Design Automation continues to deliver the bulk of profits. Given these dynamics, we suggest that investors should accumulate this Zacks Rank #1 (Strong Buy) stock at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
While the AI spotlight stays fixed on megacap darlings, one under-the-radar software company quietly sits at the center of every chip those giants design, and analysts are starting to notice the gap between its valuation and its growth.
Most AI money still flows into the megacaps, but every AI accelerator has to be designed, verified and packaged before it ships. Synopsys (NASDAQ:SNPS | SNPS Price Prediction) sells the software and silicon IP that make that possible.
Shares trade at $509.26. The 24/7 Wall St. price target is $632.92 over the next 12 months, which implies 24.28% upside. The model rates the stock a buy with high confidence.
24/7 Wall St. Price Target Summary Metric Value Current Price $509.26 Price Target from 24/7 Wall St. $632.92 Upside/Downside 24.28% Recommendation BUY Confidence Level 90% Bullish analyst view stands at 92% with zero bearish ratings, and quarterly earnings grew 89.3% year over year. Synopsys leads in electronic design automation (EDA) and added engineering simulation through the Ansys deal.
Every new AI chip adds design complexity, driving more demand for Synopsys tools (we reverse-engineered what the biggest tech winners looked like early in a free playbook you can grab here).
A 29% Monthly Rally Puts Synopsys Back Near Its Highs Shares rose 17.06% over the past week and 29.28% over the past month, up 8.39% year to date. The stock sits about 5.6% below its 52-week high of $539.48 and roughly 40% off its low of $362.55.
The fiscal Q3 report on August 26 showed revenue of $2.48 billion, up 42.4% and ahead of the $2.44 billion estimate. Non-GAAP EPS of $3.91 beat the $3.67 consensus. Management raised full-year guidance to $9.69 billion to $9.74 billion revenue and $15.04 to $15.10 non-GAAP EPS. Shares slipped 10.71% over the following 30 days, setting up the current rebound.
Why Bulls See $730 Ahead Management expects double-digit organic EDA growth in Q4. Multiphysics Fusion, the first joint Synopsys-Ansys product, should add to EDA growth in 2027. Die-to-die IP is on pace to double, and Synopsys won more than 95% of PCIe 7 opportunities. CEO Sassine Ghazi: “These chips will not happen without our interface IP.”
Analysts largely agree, with 23 bullish ratings and just 2 Holds. Our bull case reaches $730.70.
What Could Knock Synopsys Off Course Export controls tied to China, customer concentration and about $10 billion of debt are real risks. Morgan Stanley downgraded the stock over growth-deceleration concerns.
GAAP EPS of $2.84 trailed non-GAAP results, and the trailing P/E stands at 86, partly from roughly $404 million in quarterly non-cash amortization tied to Ansys. Free cash flow guidance of $2.6 billion gives a cleaner read. The bear case of $540.93 still sits above today’s price.
Synopsys Looks Cheaper Than Cadence and Arm Cadence Design Systems (NASDAQ:CDNS) is Synopsys’ closest EDA rival, trading at 32 times forward earnings versus 23 for Synopsys. The valuation gap favors Synopsys.
Arm Holdings (NASDAQ:ARM) competes in licensed silicon IP, trading at 152 times forward earnings with a beta of 3.789. Compared with both peers, our 24/7 Wall St. price target looks reasonable.
Company Forward P/E Quarterly Revenue Growth (YoY) Synopsys 23 42.4% Cadence 32 24.2% Arm 152 22.4% Synopsys Earns Its BUY Rating The 24/7 Wall St. price target of $632.92 carries a buy rating and 90% confidence. Synopsys trades below Cadence despite faster reported growth.
Keep an eye on whether Q4 supports double-digit EDA growth, and on whether export restrictions expand or Design IP stalls. Strong analyst consensus and accelerating earnings back the bullish case.
Year Price Target from 24/7 Wall St. 2026 $632.92 2027 $721.07 2028 $835.76 2029 $919.25 2030 $969.19 These projections assume Synopsys delivers on AI design demand and Ansys integration. Faster royalty adoption could push results higher; trade restrictions could draws them lower.
Contact [email protected] for any questions or corrections.
Identifying the next big AI winners has become increasingly challenging. The theme is maturing, and much of the extraordinary growth across the industry is already reflected in stock prices. However, I think I've identified one company that could be on the verge of a major move higher.
Synopsys ((SNPS - Free Report) ), a leading provider of semiconductor design software and intellectual property, has spent much of the last three years consolidating following an enormous multiyear rally. Concerns over slowing growth, the integration of its massive Ansys acquisition and the potential for AI to disrupt traditional software businesses have weighed on shares.
But the outlook appears to be improving rapidly. A series of major AI partnerships with Amazon and OpenAI, stronger-than-expected long-term financial targets and increasingly bullish analyst revisions have given investors several fresh reasons to reconsider the stock.
And with shares now approaching a major breakout on the quarterly chart, the timing looks particularly interesting.
Let's take a closer look at the recent developments, Synopsys' improving earnings outlook and the technical setup that suggests another substantial rally could be approaching.
Image Source: Zacks Investment Research
AI Partnerships and Stronger Growth TargetsSynopsys has long occupied an important position in the semiconductor industry. Its electronic design automation software helps companies develop increasingly complex chips, while its semiconductor intellectual property allows customers to incorporate proven designs into their own processors.
That makes Synopsys a critical supplier to the AI infrastructure buildout, particularly as hyperscalers invest billions developing their own custom accelerators. And the company's recent Investor Day delivered several important catalysts.
First, Synopsys announced a major agreement with Amazon ((AMZN - Free Report) ), which will use its intellectual property across custom silicon programs including Trainium, Graviton and Nitro. Importantly, the agreement introduces a royalty-based component tied to chip production, potentially allowing Synopsys to participate more directly in its customers' growth.
Separately, Synopsys announced a partnership with OpenAI to develop GPT-Synopsys, a specialized AI model for semiconductor design.
This is an especially interesting development considering the market's concern that AI could disrupt traditional software providers. Rather than being displaced by the technology, Synopsys may be positioned to become one of its beneficiaries.
Management also delivered a stronger-than-expected financial outlook.
Fiscal 2027 revenue is projected at $11.10–$11.20 billion, above the roughly $10.81 billion analysts had expected. Non-GAAP earnings guidance of $19.04–$19.12 per share was also comfortably ahead of the prior consensus near $17.81.
Looking further ahead, management now targets roughly 15% annual revenue growth through fiscal 2030, with operating margins approaching 50% and annual adjusted EPS growth in the mid-20% range.
The company also intends to repurchase approximately $1 billion in shares over the coming months, with a longer-term goal of returning up to 50% of free cash flow to shareholders.
That's a pretty compelling combination of new growth opportunities, improving profitability and shareholder returns.
Synopsys Earnings Estimates Are Moving HigherThe improving fundamental outlook is already showing up in analyst estimates. SNPS currently sports a Zacks Rank #1 (Strong Buy), following a recent upgrade from #2 (Buy), with revisions accelerating after the company's Investor Day.
The most notable changes have come in fiscal 2027, with fresh upgrades hitting in the last week. Over the last 60 days, the consensus earnings estimate has increased 6.1% to $18.26 per share, with five upward revisions and one downward revisions during that period.
And there could be additional upside to those estimates. Management's new fiscal 2027 guidance calls for adjusted EPS of $19.04–$19.12, still comfortably above the current consensus.
The near-term earnings trend has also been encouraging. In its latest quarter, Synopsys reported revenue of $2.48 billion and adjusted EPS of $3.91, beating earnings expectations by approximately 6.5%.
Valuation remains a consideration, with shares trading near 33x current-year earnings and 27.5x next year's estimates. That's certainly not cheap, but with management targeting mid-20% annual earnings growth through fiscal 2030, the premium could be justified if execution remains strong.
And with estimates moving higher, sentiment improving and analysts increasingly bullish on the company's AI opportunities, the fundamental backdrop looks considerably more attractive than it did just a few months ago.
Image Source: Zacks Investment Research
SNPS Stock Approaches a Major Technical BreakoutPerhaps the most compelling part of the setup is the quarterly chart.
Following a massive multiyear advance, Synopsys has spent the last several years consolidating, with shares trading in a broad descending channel since their 2024 peak.
Importantly, the long-term uptrend remains intact, and the recent rally has brought SNPS right back to the upper boundary of that consolidation, following a sharp gap up at the start of this quarter.
The stock is now testing resistance around $510–$520, a breakout above which could signal the beginning of another major leg higher.
These types of multiyear consolidations are particularly interesting when accompanied by improving fundamentals. The stock has spent years digesting its prior advance, while the latest developments suggest the underlying earnings story may be accelerating again.
Of course, the breakout hasn't been confirmed yet, and a rejection at resistance could keep shares trading within the existing range.
But with the Zacks Rank improving, estimates moving higher and several major catalysts now in place, I think the setup looks increasingly constructive.
Image Source: TradingView
Should Investors Buy Synopsys Stock?Synopsys is emerging as an increasingly interesting way to participate in the AI infrastructure boom, particularly as custom semiconductor design becomes more important to the industry's growth.
The Amazon and OpenAI agreements, stronger long-term guidance and accelerating earnings revisions suggest the company may be entering a new phase of growth.
Meanwhile, the quarterly chart offers one of the more compelling technical setups I've come across recently.
Valuation isn't especially cheap, and the Ansys integration remains an execution risk. But with improving fundamentals and shares approaching a major multiyear breakout, SNPS looks like a stock worth watching closely.
Synopsys leads in Electronic Design Automation software, vital for AI chip production, with major contracts from Amazon and OpenAI accelerating its profile. SNPS posted 42% Y/Y revenue growth in Q3, with EDA software comprising 51.8% of total revenues and operating income surging 116% Y/Y. Valuation stands at a 8.8x forward price-to-revenue ratio, a 7% discount to its 3-year average, justified by robust deal flow and AI-driven demand.
Before a single AI chip reaches a fab, it passes through Synopsys software, and that chokepoint keeps getting harder to route around. Here is why a stretched valuation, ten billion dollars of acquisition debt, and slowing EDA growth have not…
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I have added Synopsys (NASDAQ:SNPS | SNPS Price Prediction) after every earnings report this year. Before any AI chip reaches a fab, engineers design, verify, and sign off on it using Synopsys software. Each new chip generation is harder to build, requiring more tools, licenses, and simulation. I want to own that toll road for the next decade.
Growth That Keeps Beating the Forecasts Fiscal Q3 revenue reached $2.48B, up 42.4% YoY. Non-GAAP EPS of $3.91 beat the $3.67 consensus by 6.44%, which makes four straight beats. Management then raised full-year guidance for the second time. Non-GAAP EPS guidance has been raised to $15.04 to $15.10, up from an original $14.38 to $14.46, and free cash flow guidance is about $2.6B.
Ansys is pulling its weight. Management expects it to contribute about $2.98 billion this year, $20 million above prior guidance. The company targets $400 million in cost synergies by year four. Joint products like Multiphysics Fusion should add to EDA growth in fiscal 2027.
A Moat Built on Sign-Off Trust EDA runs as a duopoly. Backlog stood at $10.9 billion at Q3 end. CEO Sassine Ghazi noted: “Customers will not invest hundreds of millions of dollars in a product without having the confidence that it is going to work.” Synopsys won more than 95% of PCIe 7 opportunities, and its die-to-die business is on pace to double.
Why My Money Goes Here Instead of Cadence Cadence Design Systems (NASDAQ:CDNS) is the alternative. Cadence trades at a forward P/E of 32 and 16.68 times sales. Synopsys trades at a forward P/E of 23 and 9.94 times sales. The stock rose 21.7% last week to $505.17, and even at that price it sits near 27x the $18.583 fiscal 2027 consensus.
Debt and Integration Risks I Refuse to Ignore Ansys left Synopsys carrying about $10 billion of debt. Restructuring charges should total $200M to $250M this fiscal year, and roughly $403M of quarterly amortization drives the trailing P/E to 86. China export controls, a short customer list, and shareholder lawsuits over Design IP add risk. Q3 EDA growth slowed to 8.5%.
None of that has changed my thesis. Management repaid $3.46B of debt in the first half and paid off term loans early. Total liabilities fell 19.6% YoY, and cash rose to $3.61B. Double-digit organic EDA growth is also expected in Q4 and for the full year.
What Keeps My Buy Button Active Analysts made 18 upward revisions to fiscal 2027 EPS over the past seven days, with none lower. Royalty-based custom IP, agentic AI workflows, and joint Ansys products sit ahead. Synopsys pays no dividend. The stock has returned 752.46% over ten years. Chips keep getting harder to design, Synopsys sends a bill for every added layer of difficulty, and I expect to own a bigger share of those bills.
Contact [email protected] for any questions or corrections.
Investors interested in Computer - Software stocks are likely familiar with Progress Software (PRGS - Free Report) and Synopsys (SNPS - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, both Progress Software and Synopsys are sporting a Zacks Rank of #1 (Strong Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is only part of the picture for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
PRGS currently has a forward P/E ratio of 6.04, while SNPS has a forward P/E of 32.29. We also note that PRGS has a PEG ratio of 1.21. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. SNPS currently has a PEG ratio of 1.44.
Another notable valuation metric for PRGS is its P/B ratio of 2.87. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, SNPS has a P/B of 3.01.
Based on these metrics and many more, PRGS holds a Value grade of A, while SNPS has a Value grade of F.
Both PRGS and SNPS are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that PRGS is the superior value option right now.
Synopsys has beaten earnings estimates three times this year, yet shareholders have walked away from each report with less than they started. A chart pattern that keeps repeating raises a pointed question about whether strong fundamentals can ever outrun the…
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Synopsys (NASDAQ:SNPS | SNPS Price Prediction) trades at $488.47. The chip-design software leader is rallying again, and its 2026 chart has already shown three distinct peaks. Each of those peaks faded.
Synopsys leads electronic design automation (EDA), the software chipmakers use to design and verify semiconductors. It also licenses silicon IP. The roughly $35B Ansys acquisition turned it into a silicon-to-systems engineering provider. Shares rose 16.97% in a week, and Barron’s named it the top stock in the Nasdaq 100 during one recent session.
Three Beat-and-Raise Quarters Power the AI Design Story Fiscal Q3 revenue reached $2.48B, up 42.4% YoY. Non-GAAP EPS came in at $3.91 against a $3.67 consensus. Management raised full-year guidance for the second straight quarter, to non-GAAP EPS of $15.04 to $15.10. Design IP returned to growth, rising about 11% to $474 million. EDA growth is expected to speed up to double digits.
New products give the story more room to run. Multiphysics Fusion, the first joint Synopsys-Ansys product, delivered up to 10x faster design closure for early customers and should start adding to EDA growth in 2027. Synopsys is also pursuing license-plus-royalty deals with AI customers (the broader AI expansion extends well past the chipmakers themselves, something we covered across power, cooling, and infrastructure suppliers in a free report here). At a forward P/E of 23, investors are paying that multiple for ~$2.6B in guided free cash flow.
Every Earnings Beat This Year Ended in a Selloff On average, the stock fell 2.35% the day after an earnings beat. Thirty days after the Q1, Q2, and Q3 reports, shares were down 10.06%, 7.19%, and 10.71%. Strong results have repeatedly failed to hold the stock up.
Debt still remains near $10 billion. Amortization of Ansys intangible assets drags GAAP EPS guidance down to $3.84 to $4.08, which leaves a trailing P/E of 86. Backlog slipped slightly from the prior quarter, and Morgan Stanley (NYSE:MS) issued an earlier downgrade that warned of slowing growth. Export-control risk also remains unmeasured.
Strong Execution Meets a Stock That Keeps Round-Tripping Margins of 41.6%, early debt paydown, and Ansys synergies running ahead of schedule all point to further upside. Repeated post-earnings drops and a still-heavy balance sheet support the bear case. Several key growth drivers, including royalties and joint products, are still in early adoption.
Wall Street Sees 16.6% Upside, but Shares Trail the Market The consensus target of $569.78 implies 16.6% upside from current levels across 25 analysts. Price targets are one input and come with no guarantee.
Strong Buy: 4 Buy: 19 Hold: 2 Sell: 0 The stock gained 24.03% over the past month, compared with 0.61% for the S&P 500. Year to date, Synopsys is up just 3.99%, while the index has risen 13.63%. Its 52-week range runs from $362.55 to $539.48.
Fiscal Q4 Will Show Whether the Pattern Breaks Synopsys trades at $488.47 heading into its next report.
The fiscal Q4 report is the next real test. Guidance calls for revenue of $2.53B to $2.58B and non-GAAP EPS of $4.10 to $4.16. A beat that holds for a full month, followed by a move above $539.48, would signal a break from the pattern.
Downside risks would build if Design IP stalls, EDA growth misses double digits, or export rules tighten. Each quarter, watch IP momentum, debt reduction, and signed royalty contracts.
The rally could continue. A fourth peak would carry its own risk, since the stock has fallen after each earnings report this year. Synopsys has earned attention, and the next test is whether it can hold a rally.
Contact [email protected] for any questions or corrections.
What happened Synopsys, Inc. (NASDAQ: SNPS) said Oct. 5, 2026 that it entered an accelerated share repurchase to buy back $1 billion of stock. JPMorgan Chase Bank, National Association is the counterparty to the agreement. Under the terms, Synopsys expects an initial delivery of approximately 1,735,000 shares. The company said the deal is an ASR.
Any remainder, if any, is to be settled on or before January 5, 2027, after the repurchases are completed. The final share count will depend on Synopsys daily volume-weighted average share prices during the repurchase period, less a discount. The 8-K repeats the news on the same date.
Key numbers Metric Latest Change Source Repurchase authorization $1 billion SEC Exhibit 99.1 press release Initial share delivery approximately 1,735,000 shares SEC Exhibit 99.1 press release Settlement deadline January 5, 2027 SEC Exhibit 99.1 press release Read more: Synopsys (SNPS) stock analysis and investment case Why it matters OptimistFi's case is that Synopsys turns high-margin, sticky EDA and silicon-IP software into recurring cash flow. The ASR adds a direct capital-return use for that cash. The headline authorization is $1 billion, and the initial delivery shows the company plans to retire stock before final settlement. That makes the release useful as a capital-allocation marker.
It confirms management has chosen a buyback as the stated use of cash in this filing. The strongest caveat is in the terms, because the repurchased share count still moves with the stock price. The press release also makes clear the final share count is not locked, because the repurchase price floats during the period. That structure lets the company start the buyback now and settle the rest later.
Browse: stock research on every company OptimistFi covers
What's next The only dated follow-up in the release is that any remainder is due on or before January 5, 2027. That settlement will show how many shares Synopsys ultimately retires under the $1 billion program. A smaller remainder would mean more of the authorization was completed, while a larger remainder would leave more of the repurchase unsettled.
If the settlement leaves only a small remainder, Synopsys will have retired more of the announced program by January 5, 2027. The release ties that final step to a specific calendar date.
More from OptimistFi SNPS stock: the Synopsys thesis, its status and the next test to watch United States Brent Oil Fund, LP (NYSE Arca: BNO) Tracks a Supply Gap Alpha Teknova, Inc. (NASDAQ: TKNO) Adds Regulatory Support for PluriFreeze Meta Platforms, Inc. (NASDAQ: META) Has a Conditional $18 Billion Bill Stock research on every company OptimistFi covers Latest stock research and investment-case updates OptimistFi: evidence-first equity research Sources SEC 8-K — Current report announcing the accelerated share repurchase and incorporating the press release. SEC Exhibit 99.1 press release — News release announcing the $1 billion accelerated share repurchase and the initial share delivery. Read the full OptimistFi thesis on Synopsys, Inc.: https://optimistfi.com/stocks/SNPS
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Wall Street warmed to Synopsys's (SNPS -0.46%) recent investor day presentation, with several analysts promptly hiking price targets, including a Deutsche Bank analyst who maintained a buy rating and raised the target to $640 from $590.
Analysts liked the tech company's growth targets and the multi-year agreement with Amazon.com, which supported its long-term growth aspirations. Are they right to be enthusiastic? I think so, and here's why.
Synopsys is moving to where the AI market is heading The company's roots lie in electronic design automation (EDA) solutions that help customers -- predominantly semiconductor companies -- design and test chips. That's still a major end market for the company, but chip design is moving beyond traditional semiconductor companies and into a wider range of end-market customers. At the same time, the rapid expansion of physical AI (think autonomous vehicles and robots) is increasing the need for computing power in increasingly complex systems.
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The growth opportunity is encapsulated in the announcement of a $1 billion multi-year agreement with Amazon, whereby the hyperscaler will accelerate its "custom silicon innovation and advance the development of increasingly complex AI-powered products."
Meanwhile, Synopsys continues to integrate its acquisition of the engineering simulation solutions company Ansys as it strives to offer a suite of "silicon-to-systems" solutions to an ever-increasing range of customers. By adding Ansys (systems testing) to its silicon design solutions, Synopsys can let customers design and modify chips while also testing their designs.
Image source: Getty Images.
Growth targets from investor day These factors combine to create an opportunity for Synopsys to develop what management calls "differentiated silicon tailored to specific workloads and system architectures." It's an opportunity that management sees as leading to the following over the long term:
Mid-teens revenue growth Operating margin of 50% by 2030, compared to about 44% in 2026 Earnings-per-share growth (EPS) in the mid-20% range Free cash flow (FCF) growth in the mid-20% range Those are pretty aggressive targets, and based on management's guidance for 2026 and 2027, a rough estimate for EPS in 2030 could be $0.37, with FCF of $6 billion. Those estimates would put Synopsys at a price-to-earnings multiple of about 13 and a price-to-FCF multiple of about 15.3 in 2030. These valuations are highly attractive for a company growing at such a rate.
Image source: Getty Images.
Where next for Synopsys? There's no guarantee that these end markets will grow organically in line with Synopsys' expectations, especially since they rely on assumptions about new market growth and technological adoption that might not unfold as smoothly as management's estimates anticipate.
On the other hand, in-house chip design is growing in response to the increasing complexity and demands of physical AI development. Those trends are powerful, and the customer Synopsys just signed, Amazon, is a great example of the kind of lead customer driving that evolution. All this makes Synopsys an excellent stock option for AI bulls.
, /PRNewswire/ -- Synopsys, Inc. (Nasdaq: SNPS) today announced that it has entered into an accelerated share repurchase agreement (ASR) with JPMorgan Chase Bank, National Association to repurchase an aggregate of $1 billion of Synopsys stock.
Synopsys headquarters in Sunnyvale, Calif. Under the terms of the ASR, Synopsys will receive an aggregate initial share delivery of approximately 1,735,000 shares, with the remainder, if any, to be settled on or before January 5, 2027, upon completion of the repurchases. The specific number of shares that Synopsys ultimately repurchases under the ASR will be based on the average of Synopsys' daily volume-weighted average share prices during the repurchase period, less a discount.
About Synopsys
Synopsys, Inc. (Nasdaq: SNPS) is the leader in engineering solutions from silicon to systems, enabling customers to rapidly innovate AI-powered products. We deliver industry-leading silicon design, IP, simulation and analysis solutions, and design services. We partner closely with our customers across a wide range of industries to maximize their R&D capability and productivity, powering innovation today that ignites the ingenuity of tomorrow. Learn more at www.synopsys.com.
Forward-Looking Statements
This press release contains certain forward-looking statements regarding the expected settlement of the ASR. These statements involve risks, uncertainties, and other factors that could cause our actual results, timeframes, or achievements to differ materially from those expressed or implied in such forward-looking statements. Such risks, uncertainties and factors include but are not limited to the market price of Synopsys common stock during the repurchase period; the ability of JPMorgan Chase Bank, National Association to buy or borrow shares of Synopsys common stock; the impact of global and regional economic and market conditions, including illiquidity and other risks of instability in the banking and financial services industry; and the risks more fully described in filings Synopsys makes with the SEC from time to time, including in the sections entitled "Risk Factors" in Synopsys' latest Annual Report on Form 10-K and latest Quarterly Reports on Form 10-Q. Synopsys undertakes no duty to, and does not intend to, update any forward-looking statement, whether as a result of new information, future events or otherwise, unless required by law.
INVESTOR CONTACT:
Tushar Jain
Synopsys, Inc.
650-584-4289
[email protected]
EDITORIAL CONTACT:
Cara Walker
Synopsys, Inc.
650-584-5000
[email protected]
Synopsys just surged to lead the Nasdaq 100 after a blockbuster Investor Day packed with OpenAI partnerships, Amazon deals, and a raised earnings outlook. Whether this rally has real staying power or faces serious headwinds comes down to one glaring…
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Synopsys (NASDAQ:SNPS | SNPS Price Prediction) is the top performer in the NASDAQ 100 today. The stock is up 8.8% to about $474.28 following a busy Investor Day. The 24/7 Wall St. price target of $594.34 means 25.31% upside over the next 12 months.
24/7 Wall St. Price Target Summary Metric Value Current Price $474.28 The Price Target from 24/7 Wall St. $594.34 Upside 25.31% Model Rating BUY Confidence Level 90% A 90% confidence reading is high for our model. The chip-design software leader has spent a year integrating Ansys, and AI is driving chip complexity to new levels.
OpenAI and Amazon Deals Ignite a 14% Weekly Rally Synopsys has gained 14.56% over the past week. On September 30, Synopsys announced GPT-Synopsys with OpenAI and a multi-year IP agreement for custom silicon with Amazon (NASDAQ:AMZN), alongside a long-term financial model at its Investor Day.
Fundamentals back up the rally: fiscal Q3 revenue came in at $2.48B, ahead of the $2.44B estimate and up 42.4% year over year. Non-GAAP EPS of $3.91 exceeded expectations of $3.67. Management also raised full-year EPS guidance to $15.04 to $15.10.
Why Bulls See $685 Within Reach The bull case of $685.40 depends on new AI revenue streams. Management said 20 customers were testing agentic EDA tools with “subscription plus consumption” pricing. Revenue synergies from combined Synopsys and Ansys technology are expected in FY27, with a $400 million revenue synergy target.
Analysts expect FY2027 EPS of $17.6932, with the high estimate at $20.0054. Of the 23 analysts covering the stock, none rate it Sell, and their consensus target is $553.77.
What Could Pull Synopsys Toward $514 Our bear case is $513.93. Main risks include export controls tied to China, total debt of about $10 billion, and restructuring charges planned for Q4. At roughly 76x trailing earnings, GAAP results look expensive, though Ansys amortization and integration costs drag down GAAP profit.
On a forward basis, the stock trades at 23x. Synopsys paid off $3.45B of debt in Q1 and expects free cash flow of about $2.6B this year.
Synopsys Trades Cheaper Than Its Closest Rival Despite Faster Growth Company Forward P/E Quarterly Revenue Growth (YoY) Synopsys 23 42.4% Cadence Design Systems (NASDAQ:CDNS) 32 24.2% Keysight Technologies (NYSE:KEYS) 22 36.5% Cadence trades at roughly 32x forward earnings while growing revenue 24.2%. Synopsys is growing faster at a lower multiple, suggesting our target is reasonable and somewhat conservative.
Synopsys Still Has Room to Run Our 24/7 Wall St. price target of $594.34 carries a buy rating at 90% confidence. The deciding factor is the valuation gap: faster growth than Cadence at a lower multiple.
The numbers point higher if Design IP rebounds and agentic pricing shows up in FY27 guidance.
Year The Price Target from 24/7 Wall St. 2026 (12-month target, October 2027) $594.34 2027 (January 2028) $615.70 2028 (January 2029) $701.22 2029 (January 2030) $810.11 2030 (October 2031) $921.01 Synopsys needs to execute on its silicon-to-systems strategy for these projections to hold. Faster agentic AI adoption could driving results higher; export restrictions could driving them lower.
Contact [email protected] for any questions or corrections.
SummarySynopsys earns a buy rating, driven by AI-fueled chip complexity and the transformative Ansys acquisition, expanding its addressable market beyond traditional EDA.Q3 FY26 revenue surged to $2.477B, with Design Automation comprising over 80% of sales; non-GAAP EPS rose to $3.91.Ansys integration enables Synopsys to address system-level modeling, with Multiphysics Fusion technology signaling long-term growth beyond silicon design.Management targets FY27 revenue of $11.15B and double-digit growth, while planning to allocate up to 50% of free cash flow to share buybacks. Vertigo3d/E+ via Getty Images
Thesis Synopsys, Inc. (SNPS) takes a significant place in the semiconductor and technology sector. The company does not make chips itself, but its electronic design automation (EDA) software, semiconductor intellectual property, and modeling solutions are used when creating more advanced
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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Key Takeaways Amazon signed a $1B plus Synopsys deal to accelerate custom chip design and expand AWS silicon capabilities.AWS revenues grew 37% to $42.2B in Q2, while its backlog reached $496B with triple-digit growth.Amazon raised 2026 capex to $220B as competition and capacity constraints weigh on near-term prospects. Amazon (AMZN - Free Report) has deepened its custom silicon push by signing a strategic, multi-year intellectual property agreement with Synopsys (SNPS - Free Report) , valued at more than $1 billion, to accelerate chip design for Amazon Web Services (AWS). Amazon will serve as the lead customer for Synopsys' application-optimized silicon IP and expand its use of Synopsys' electronic design automation, simulation and agentic AI tools. The deal builds on a collaboration spanning more than 15 years and supports Amazon's purpose-built chips, including Nitro for cloud security and networking, Graviton for general-purpose computing and Trainium for AI training and inference.
Custom silicon is becoming a key AWS differentiator. The companies will accelerate multiphysics solutions on Trainium and Graviton and apply AI across silicon-to-system engineering workflows. Synopsys will adopt Amazon EC2 and Amazon Bedrock for its own product development, creating a two-way commercial relationship. Amazon's chips business has already surpassed a $25 billion annual revenue run rate, growing at triple-digit percentages year over year. Graviton is used by 98% of the top 1,000 EC2 customers, while Trainium has secured multi-year, multi-gigawatt commitments from Anthropic and OpenAI.
AWS AI Momentum StrengthensRecent announcements reinforce this momentum. In August, AWS and NVIDIA unveiled plans to deploy an additional 2 million Blackwell Ultra, Rubin and Rubin Ultra GPUs across AWS infrastructure in 2027-2028, along with Vera CPU support. In September, AWS agreed to acquire DuckLabs, the company behind DuckDB, and expanded its Salesforce collaboration to bring AWS frontier agents into Slack. AWS also launched Agentic Grid Planning for utilities, developed with Duke Energy, and introduced energy-focused AI workflows for Amazon Quick.
AWS revenues grew 37% year over year to $42.2 billion in the second quarter of 2026, its fastest growth in 18 quarters, taking the annualized revenue run rate to $169 billion. Segment operating margin expanded to 39.4% from 32.9% a year ago. The AWS backlog reached $496 billion, growing at a triple-digit percentage rate and offering solid multi-year revenue visibility. AWS' AI business also crossed a $25 billion annual revenue run rate, while advertising revenues rose 26% to $19.8 billion.
The Zacks Consensus Estimate for AMZN's 2026 earnings is pegged at $13.01 per share, indicating an 81.45% increase from the figure reported in the year-ago period. The strong expected earnings growth, aided by AWS margin expansion and advertising strength, supports the long-term thesis.
Q3 Guidance and Capex PlansFor the third quarter of 2026, Amazon expects net sales between $197 billion and $202 billion, indicating 9-12% year-over-year growth. Excluding the impact of Prime Day, which shifted into the second quarter this year, growth would be nearly 400 basis points higher. Operating income is projected between $22.5 billion and $26.5 billion, up from $17.4 billion in the year-ago quarter. Foreign exchange is expected to have an unfavorable impact of nearly 80 basis points.
However, the heavy investment cycle remains a near-term concern. Amazon raised its 2026 cash capital expenditure outlook to roughly $220 billion from about $200 billion, primarily for AWS and generative AI, with higher memory costs also contributing. Cash capex was $53.1 billion in the second quarter alone. Trailing 12-month free cash flow turned into an outflow of $7.6 billion against an inflow of $18.2 billion a year ago, while long-term debt nearly doubled to $128.9 billion from the end of 2025. Management also indicated that capacity may still fall short of demand this year.
AMZN Shares Outperform Amid Stiff Cloud CompetitionAmazon shares have returned 6.8% in the year-to-date period, in contrast to the Zacks Internet – Commerce industry’s decline of 0.7%. The Zacks Retail-Wholesale sector has declined 4.3% in the said time frame.
However, competition in the cloud market remains intense and rapidly evolving. Microsoft (MSFT - Free Report) is leveraging its Azure platform and deep enterprise relationships, while Microsoft's AI partnerships continue to attract large customers. Alphabet (GOOGL - Free Report) -owned Google is gaining traction through its data analytics strength and custom TPU chips, making Google a formidable AI infrastructure rival.
Oracle has emerged as an aggressive challenger, with its cloud infrastructure winning large AI training contracts, as it continues to expand its multicloud partnerships. Microsoft, Google and Oracle are all ramping up AI infrastructure spending, which could pressure pricing and margins across the industry. AWS' lead in custom silicon, reinforced by the Synopsys deal, offers a structural cost advantage, but defending market share against these rivals will require sustained heavy investment in capacity.
AMZN's Year-to-date Price Performance
Image Source: Zacks Investment Research
Premium Valuation Calls for PatienceFrom a valuation standpoint, AMZN stock appears overvalued, trading at a forward 12-month price/earnings ratio of 22.37X, higher than the industry’s 20.11X. Amazon has a Value Score of D. The premium reflects confidence in AWS-led growth but leaves limited room for error if capex returns take longer to materialize.
AMZN's Valuation
Image Source: Zacks Investment Research
ConclusionAmazon's Synopsys deal, fast-growing chips business, accelerating AWS growth and $496 billion backlog support its long-term prospects. However, elevated capex, negative free cash flow, capacity constraints and intensifying competition temper near-term upside. Given the premium valuation, existing investors should hold the stock, while new investors may wait for a better entry point. Amazon currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Synopsys (SNPS), a maker of electronic design automation (EDA) software spanning semiconductors to systems, scored high marks from investors for its plan to drive growth through the AI-driven transformation of engineering. Synopsys stock rose after its investor day presentation.
At the New York City event on Wednesday, Synopsys issued fiscal 2027 guidance above Wall Street's expectations and predicted a roughly 25% compound annual growth rate in earnings per share from fiscal 2026 through 2030.
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For its fiscal 2027 ending Oct. 31, 2027, Synopsys targeted revenue of $11.15 billion, up 15%. It also plans to spend about $1 billion on share repurchases over the coming months.
At the event, Synopsys announced agreements with Amazon.com (AMZN) and OpenAI to help those companies develop custom processors for artificial intelligence.
The Synopsys investor day was its first since the company completed its $35 billion acquisition of Ansys in July 2025.
The impact of AI on Synopsys has turned into a positive after early concerns that it could erode its business, analysts said.
Synopsys Is 'Firing On All Cylinders'
Chip and electronic system designers need reliable tools to ensure that the products they create will work as expected, Synopsys Chief Financial Officer Shelagh Glaser told Investor's Business Daily on Thursday.
"Everything that our customers are doing eventually manifests itself in a physical product," she said. "We sell sign-off tools, which if you're making silicon, you need to have sign-off. You need to know that that model of the chip is actually what you're going to get back in manufacturing."
On Wednesday, Synopsys stock rose 4.8% to 434.94. In afternoon trades on the stock market today, Synopsys surged more than 13% to 493.67.
"It was really clear to everybody that we're firing on all cylinders," Glaser said. "And as we move into this unbelievable market opportunity, we're really changing our business models and capturing more value as we go forward."
AI Is Benefiting Synopsys
Synopsys' presentation demonstrated that "AI is friend, not foe, to EDA/simulation companies like SNPS," StoneX analyst Gary Mobley said in a client note. He rates Synopsys stock as buy with a price target of 570.
JPMorgan analyst Harlan Sur said he sees "no AI cannibalization" to Synopsys' business. "In fact, Synopsys will benefit from AI on many fronts, especially as its design/verification/simulation solutions tackle complex chip/systems co-design challenges that require optimization across electrical, thermal, power, and mechanical domains … all utilizing embedded AI capabilities and further enhanced by its new AI Agentic portfolio to drive improved productivity, accuracy, and higher monetization value to Synopsys."
Synopsys Stock Scores Price-Target Hikes
At least five Wall Street analysts raised their price targets on Synopsys stock after the investor day.
KeyBanc Capital Markets analyst Jason Celino reiterated his overweight rating on Synopsys stock and raised his price target to 605 from 600.
In a report, Celino said the Synopsys presentation "answered many of the bear concerns, and reinforces that EDA remains a compelling opportunity."
Follow Patrick Seitz on X at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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Synopsys SNPS shares jumped 13% on Thursday after the chip-design software maker issued fiscal 2027 revenue and profit forecasts above analysts’ expectations and announced multi-year agreements with OpenAI and Amazon Web Services.
The company outlined its long-term growth targets at its 2026 Investor Day in New York, highlighting demand for chip-design and simulation tools as artificial intelligence investment drives increasingly complex semiconductor development.
Synopsys expects fiscal 2027 revenue of between $11.1 billion and $11.2 billion, above the $10.81 billion average analyst estimate compiled by LSEG.
Its forecast for earnings per share of $19.04 to $19.12 also exceeds the $17.81 consensus estimate.
The company is targeting roughly 15% compound annual revenue growth between fiscal 2026 and 2030.
It expects its adjusted operating margin to reach about 44% in fiscal 2027 and approximately 50% by fiscal 2030.
Synopsys also expects non-GAAP earnings per share to grow at a mid-20% compound annual rate through fiscal 2030.
Within its business, the company forecasts electronic design automation revenue growth of at least 13% annually, simulation and analysis revenue growth of at least 10%, and Design IP growth of at least 17%.
Berenberg said the investor day “provided significantly more than the market expected,” according to a note to clients.
The updated outlook came alongside new agreements with OpenAI and AWS.
Synopsys agreed to share revenue with OpenAI as part of a partnership to develop an AI model for chip-design work.
Amazon Web Services also signed a multi-year agreement worth more than $1 billion to license Synopsys’ chip-design intellectual property.
Deutsche Bank analyst Gianmarco P. Conti maintained a Buy rating on Synopsys and raised his price target to $640.
Conti said the Amazon and OpenAI agreements could support “higher segment growth floors, faster Ansys revenue synergy ramp, and a steeper operating-margin trajectory.”
Conti raised his fiscal 2030 revenue estimate for Synopsys to $15.87 billion from $15.15 billion.
Bank of America also raised its price target to $600 from $500 while maintaining a Buy rating.
Analyst Vivek Arya said Synopsys’ targets imply roughly 23% compound annual growth in pro forma EPS from fiscal 2026 through 2030.
KeyBanc raised its price target to $605 from $600 and maintained an Overweight rating, citing the fiscal 2027 guidance, higher long-term growth targets and planned margin expansion.
Synopsys expects free cash flow to grow at a mid-20% compound annual rate from fiscal 2026 through 2030.
After investing in the business, the company expects to return up to 50% of free cash flow to shareholders through share repurchases.
The company plans to buy back about $1 billion of its shares over the coming months, subject to market conditions.
Synopsys is also seeking to diversify its revenue beyond traditional software licensing through usage-based fees, customised products and royalties, according to Deutsche Bank.
The company’s updated framework comes as it positions its design and simulation portfolio around the expansion of digital and physical AI and the wider shift towards AI-powered engineering.
U.S. stocks were lower, with the Dow Jones index falling over 300 points on Thursday.
Shares of Synopsys Inc (NASDAQ:SNPS) rose sharply after the company issued fiscal-year 2027 financial guidance above estimates.
Synopsys issued financial guidance for fiscal year 2027 and a comprehensive multi-year financial framework through fiscal year 2030.
Synopsys shares jumped 10.8% to $482.23 on Thursday.
Here are some other big stocks recording gains in today’s session.
Accenture Plc (NYSE:ACN) shares jumped 18.3% to $216.66 after the company reported better-than-expected fourth-quarter financial results and issued FY27 sales guidance above estimates.Enerflex Ltd (NYSE:EFXT) gained 15.5% to $26.32. Enerflex announced a contract award for large-scale data center development.Capital Clean Energy Carriers Corp (NASDAQ:CCEC) gained 15.3% to $21.60.Armada Acquisition Corp II (NASDAQ:XRPN) jumped 14.5% to $18.78.Vicor Corp (NASDAQ:VICR) gained 11.4% to $321.99 after the company raised its third-quarter sequential revenue growth guidance.Everforth Inc (NYSE:EFOR) rose 11% to $36.55.USA TODAY Co Inc (NYSE:TDAY) rose 9.9% to $6.92.Fair Isaac Corp (NYSE:FICO) surged 9.7% to $650.00.Coherent Corp (NYSE:COHR) gained 9.1% to $314.00.Concentrix Corp (NASDAQ:CNXC) rose 9.1% to $27.22 after the company reported mixed third-quarter financial results and issued weak guidance for the current quarter. Also, the company narrowed its FY26 adjusted EPS guidance and cut its FY26 sales guidance below estimates.Lumentum Holdings Inc (NASDAQ:LITE) gained 8.7% to $1,056.39.Huron Consulting Group Inc (NASDAQ:HURN) rose 6.8% to $167.63.Photo via Shutterstock
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SummarySynopsys, Inc. is rated Strong Buy with a $771 price target, driven by agentic AI integration and a robust EDA/IP growth outlook.SNPS's Factory 2 model and upcoming royalty business are expected to generate margin-accretive, recurring revenue starting in eFY28, supporting durable mid-teen growth.Major multi-year agreements, such as the $1B+ Amazon deal, and partnerships with OpenAI position SNPS for leadership in custom silicon and AI-driven chip design.SNPS targets 50% operating margins by 2030, improved leverage post-Ansys acquisition, and plans to return 50% of annual FCF to shareholders via buybacks. J Studios/DigitalVision via Getty Images
Synopsys, Inc. (SNPS) is entering the next generation of semiconductor design with a fleet of new opportunities that will deliver value to the company. With the integration of agentic AI into its EDA platform, Synopsys
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Analyst’s Disclosure: I/we have a beneficial long position in the shares of SNPS either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Synopsys (SNPS +10.50%) stock, which makes design and simulation software for pre-production work on semiconductors, jumped 12.5% through 10:20 a.m. Thursday, after telling investors at its Investor Day that it expects to grow revenue as much as 15%, to $11.2 billion, in 2027.
Analysts polled by S&P Global Market Intelligence forecast only $9.7 billion in 2026 revenue and $11 billion in 2027.
Image source: Getty Images.
What else Synopsys said about 2027Synopsys targets a 20.7% operating profit margin in 2027. Non-GAAP margins, which have been much stronger for the company lately, will remain so; management claims its non-GAAP margin will average 44% next year.
These widely diverging accounting treatments will continue to produce widely diverging totals for Synopsys's profits. Under GAAP, the company expects to earn only $8.16 to $8.61 per share next year, but under non-GAAP, it says profits will range from $19.04 to $19.12 per share.
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Which number should investors focus on?That above is the $64,000 question. Do you value Synopsys based on its all-too-fudgeable non-GAAP earnings, or stick with tried and true generally accepted accounting principles (GAAP)? Pick the former, and Synopsys stock will look reasonably priced at a price-to-earnings ratio of about 25.4. Give Synopsys credit only for its GAAP earnings, however, and Synopsys stock is going to look awfully expensive at nearly 58 times forward earnings!
This would be a difficult decision except for one thing: A third valuation metric, price-to-free cash flow, happens to align almost exactly with P/E using non-GAAP earnings.
Valued on its free cash flow, which management estimates will be $3.1 billion in 2027, Synopsys costs just a little over 25 times FCF. With analysts forecasting that Synopsys will average 22% earnings growth over the next five years, that seems like a fair price to me.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Synopsys. The Motley Fool has a disclosure policy.
Wall Street analysts left Synopsys's Investor Day with sharply raised price targets and a growth outlook that surprised even the optimists, and the fresh deals with OpenAI and AWS may explain why the stock surged before most investors saw it…
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BofA raised its price target on Synopsys (NASDAQ:SNPS | SNPS Price Prediction) to $600 from $500 and kept its buy rating. KeyBanc raised its target to $605 from $600 and kept its overweight rating. Both moves followed the company’s September 30, 2026 Investor Day.
Two firms coming to the same conclusion points to growing Wall Street confidence that Synopsys can turn AI-driven chip complexity into faster earnings growth.
Ticker Company Firm Action Old Rating New Rating Old Target New Target SNPS Synopsys BofA Price Target Raised Buy Buy $500 $600 SNPS Synopsys KeyBanc Price Target Raised Overweight Overweight $600 $605 Analyst’s Case: Investor Day Targets Beat Expectations BofA analyst Vivek Arya said the firm “came away impressed”. Management’s targets mean pro-forma EPS compound annual growth of 23% from FY26-30, which BofA called “well ahead” of consensus. After the meeting, BofA raised its FY27 and FY28 pro-forma EPS estimates by 7% and 16%, respectively.
KeyBanc pointed to much better-than-expected initial FY27 guidance, higher long-term EDA and IP growth targets, significant operating margin expansion, and new partnerships with AWS and OpenAI. In KeyBanc’s view, the event answered many of the bears’ concerns and showed that EDA remains a compelling opportunity at current levels.
Company Snapshot: AI Demand Meets Ansys Scale Synopsys makes electronic design automation (EDA) software and silicon IP. Its about $35B Ansys acquisition makes it a “silicon-to-systems” engineering provider.
In fiscal Q3 2026, revenue reached $2.48B, up 42.4% year over year and ahead of the $2.44B consensus. Non-GAAP EPS of $3.91 exceeded the $3.67 estimate. Management raised full-year guidance to revenue of $9.69B to $9.74B and non-GAAP EPS of $15.04 to $15.10.
CEO Sassine Ghazi said at the time that “AI is driving unprecedented complexity and increasing demand for the silicon IP and engineering solutions necessary to deliver next-generation AI compute, infrastructure and physical AI systems.”
Why the Move Matters Now for Synopsys Stock Synopsys announced two deals alongside Investor Day: GPT-Synopsys, a collaboration with OpenAI, and a multi-year custom silicon IP agreement with AWS. Shares traded at $475.70 Thursday morning. That was up 9.37% in the session and 15.16% over the past week.
Before the rally, the stock was up just 1.27% year to date and down 3.59% over the past year. Higher earnings estimates could support the move if management delivers on its new targets.
What It Means for Your Portfolio A 23% EPS growth framework from a company with a $10.9 billion backlog sets a high bar for long-term investors. Execution risk remains, though.
Management has flagged export controls, tariffs, customer concentration, Ansys integration, and planned Q4 restructuring charges. The joint Synopsys and Ansys products are not expected to add to EDA growth until 2027.
The next checkpoint is Q4, where guidance calls for revenue of $2.53B to $2.58B and non-GAAP EPS of $4.10 to $4.16. Keep an eye on the stock as those results test the new outlook.
Contact [email protected] for any questions or corrections.
Synopsys Inc. (NASDAQ:SNPS) shares are trading higher Thursday after the company issued fiscal-year 2027 financial guidance above estimates.
Synopsys stock is building positive momentum. What’s driving SNPS shares up? FY27 Financial GuidanceSynopsys issued financial guidance for fiscal year 2027 and a comprehensive multi-year financial framework through fiscal year 2030.
Synopsys expects fiscal-year 2027 GAAP earnings in the range of $8.16 to $8.61 per share, and adjusted earnings per share of $19.04 to $19.12, above the consensus estimate of $17.32. The company also sees fiscal-year 2027 revenue of $11.100 billion to $11.200 billion, exceeding the consensus estimate of $10.730 billion.
The company outlined a long-term financial framework for fiscal 2026 through fiscal 2030, targeting mid-teens annual revenue growth of about 15%, a fiscal 2030 operating margin of around 50%, and free cash flow growth in the mid-20% range.
Synopsys Plans $1 Billion Share BuybackThe company also plans to repurchase about $1 billion of its shares in the coming months, subject to market conditions, signaling confidence in its long-term cash generation.
Shelagh Glaser, Synopsys CFO, said, “Our updated financial framework reflects confidence in both our growth trajectory and our ability to scale efficiently while helping customers re-engineer their engineering to accelerate AI-powered products. We remain focused on disciplined execution, converting growth into expanding margins and strong free cash flow, while continuing to invest in innovation and deliver sustainable long-term value for our shareholders.”
Synopsys, OpenAI Partner on AI Model for Chip DesignSeparately, Synopsys announced strategic partnerships with both OpenAI and Amazon.com, Inc. (NASDAQ:AMZN). Synopsys and OpenAI signed a multi-year agreement to jointly develop GPT-Synopsys, a specialized AI model optimized to use Synopsys’ electronic design automation tools for semiconductor design workflows. OpenAI will license Synopsys’ EDA tools to help develop the model, with the two companies collaborating on research and development alongside joint go-to-market initiatives under a shared revenue-sharing framework.
“The future of semiconductor engineering requires dramatic acceleration of the chip design process without compromising PPA or first-time-right silicon,” said Sassine Ghazi, President and CEO of Synopsys. “Together with OpenAI, we’re bringing frontier intelligence to chip design to help more companies develop and accelerate advanced silicon, while maintaining the rigor and trust required for manufacturing success.”
Synopsys Lands $1B-Plus Deal With AmazonSynopsys also announced a multi-year agreement worth more than $1 billion with Amazon to accelerate the engineering of Amazon’s custom chips and AWS infrastructure using Synopsys’ silicon IP and AI-powered engineering software. The deal marks an expansion of Synopsys’ silicon IP business toward a license-plus-royalty model as production volumes grow, with Amazon serving as the lead customer for application-optimized IP.
Read Next
Synopsys Shares Edge HigherSNPS Price Action: At the time of publication, Synopsys shares are trading 3.46% higher at $450.00, according to data from Benzinga Pro.
Image via Shutterstock
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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Synopsys (SNPS - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Over the past month, shares of this maker of software used to test and develop chips have returned +4.6%, compared to the Zacks S&P 500 composite's -0.4% change. During this period, the Zacks Computer - Software industry, which Synopsys falls in, has lost 3%. The key question now is: What could be the stock's future direction?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Earnings Estimate RevisionsHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Synopsys is expected to post earnings of $4.10 per share for the current quarter, representing a year-over-year change of +41.4%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.9%.
The consensus earnings estimate of $15.13 for the current fiscal year indicates a year-over-year change of +17.2%. This estimate has changed -0.5% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $17.43 indicates a change of +15.2% from what Synopsys is expected to report a year ago. Over the past month, the estimate has changed +0.1%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Synopsys is rated Zacks Rank #2 (Buy).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
In the case of Synopsys, the consensus sales estimate of $2.56 billion for the current quarter points to a year-over-year change of +13.5%. The $9.72 billion and $10.74 billion estimates for the current and next fiscal years indicate changes of +37.8% and +10.5%, respectively.
Last Reported Results and Surprise HistorySynopsys reported revenues of $2.48 billion in the last reported quarter, representing a year-over-year change of +42.4%. EPS of $3.91 for the same period compares with $3.39 a year ago.
Compared to the Zacks Consensus Estimate of $2.44 billion, the reported revenues represent a surprise of +1.68%. The EPS surprise was +6.54%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Synopsys is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Synopsys. However, its Zacks Rank #2 does suggest that it may outperform the broader market in the near term.
Index Dow Jones -0,45 % na 50676,84 b. S&P 500 -0,24 % na 7633,26 b. Nasdaq Composite -0,14 % na 26824,06 b.
Nejsledovanější americké indexy v úvodu obchodování mírně ztrácejí, zatímco výnosy desetiletých dluhopisů vystoupaly na nejvyšší úroveň od roku 2002 a ropa Brent se pohybuje blízko 100 USD za barel.
Nejsledovanější událost týdne, kvartální výsledky výrobce paměťových čipů Micron Technology (-2,7 %), překonaly očekávání. Utlumená reakce trhu podle analytiků ze Zacks Investment Research odráží skutečnost, že většina investorů na Wall Street pravděpodobně už překonání odhadů očekávala.
Výrazně se však po reportu výsledků daří poradenské společnosti Accenture (+22 %). Více podrobností naleznete zde.
Pouze technický propad zažívají akcie společnosti Corteva (-84 %). Společnost totiž dokončila odštěpení (spinoff) své divize zemědělských osiv Vylor. Akcionáři evidovaní k závěru obchodování dne 24. září obdrží za každou drženou akcii společnosti Corteva jednu akcii společnosti Vylor. Tyto akcie se dnes začínají obchodovat na NYSE pod tickerem VYLR.
Rostou akcie technologické společnosti Synopsys (+11 %), která dodává nástroje a služby pro design a výrobu polovodičů. Společnost na dni pro investory představila dlouhodobé cíle, které analytici vnímají jako silné. Společnost ve fiskálním roce 2027 očekává tržby v rozmezí 11,1 až 11,2 mld. USD. Očištěný zisk na akcii společnost cílí na 19,04 až 19,12 USD při očištěné provozní marži přibližně 44 %. Cíle pro složenou roční míru růstu (CAGR) na období FY26 až FY30 zahrnují růst tržeb v rozmezí středních desítek procent (mid-teens) a růst očištěného zisku ve středních dvacítkách procent (mid-20s%).
Daří se také akciím softwarové společnosti Fair Isaac Corp. (+8,4 %). Ředitel FHFA Bill Pulte v příspěvku na síti X uvedl, že ve středu večer hovořil s generálním ředitelem společnosti, aby zajistil, že FICO Direct bude ze strany agentury schválen. Podle Pulteho FHFA nezáleží na tom, kdo vyhraje, přičemž chtějí jen, aby si FICO a VantageScore konkurovaly, a ne aby fungovali jako kartel nebo zneužívali monopolní postavení. Tím narážel na nedávný vývoj. Program FICO Direct umožňuje přeprodejcům úvěrových zpráv počítat a distribuovat skóre FICO přímo hypotečním poskytovatelům.
Index S&P 500 -0,24 % na 7633,26 b. Nejsilnější sektory S&P Změna Nejslabší sektory S&P Změna Energie +1,1 % Základní materiály -1,6 % Informační technologie +0,2 % Reality -1,1 % Průmysl -0,2 % Finanční sektor -0,8 % Nejsilnější akcie S&P Změna Nejslabší akcie S&P Změna Accenture (ACN) +22 % Corteva (CTVA) -84 % Synopsys (SNPS) +11 % Mosaic (MOS) -5,2 % Cognizant Technology Solutions Corp (CTSH) +10 % Smurfit Westrock (SW) -4,5 % Fair Isaac Corp (FICO) +8,4 % Paramount Skydance Corp (PSKY) -4,2 % Coherent Corp (COHR) +8,0 % Estee Lauder Cos (EL) -3,8 % Zdroj: Bloomberg
Synopsys is upgraded to a buy, positioned as a stable AI-enabler with resilient software-driven growth. SNPS's acquisition of Ansys secures an end-to-end chip design lifecycle, supporting predictable revenues and accelerating growth. Management projects mid-teen revenue and mid-20s non-GAAP EPS growth, with FY27 revenue targeted at up to $11.2 billion.
Synopsys targets 15% fiscal 2027 revenue growth while planning a $1 billion share repurchase and developing a chip-design AI model with OpenAI
Synopsys (SNPS) rose 2% early Thursday after soaring nearly 5% on Wednesday after the chip-design software maker laid out financial targets and detailed a new artificial-intelligence collaboration with OpenAI.
For fiscal 2027, Synopsys expects revenue of $11.15 billion at the midpoint, representing about 15% annual growth. The company also targets non-GAAP earnings per share of $19.04 to $19.12 and an operating margin of about 44%.
Synopsys plans to repurchase roughly $1 billion of stock in the coming months. It expects operating cash flow of about $3.6 billion and capital spending of $500 million, while its longer-range plan calls for mid-teens revenue growth through fiscal 2030.
Separately, Synopsys and OpenAI will develop GPT-Synopsys, an AI model designed for chip development. The companies plan to use Synopsys software tools to support tasks including circuit coding and chip layout, with revenue shared between the partners and the model offered to customers globally.
Disclosures I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.
Shares Fall, Targets Rise—Markets and Analysts Diverge on SynopsysSynopsys NASDAQ: SNPS used its Investor Day to outline a higher long-term growth outlook, driven by demand for application-specific silicon, AI-enabled engineering workflows and the integration of Ansys simulation technology.
Chief Executive Officer Sassine Ghazi said the company is positioning itself around what it calls “silicon-to-systems” engineering, as customers increasingly need to co-optimize chips, packaging, software and physical-system performance. He said the company holds leading positions in electronic design automation, design intellectual property and simulation and analysis.
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Keysight: The Quiet Winner in the AI and Defense Spending Boom“The need to go beyond the silicon innovation to silicon to system is a necessity because the optimization cannot happen at one level of the stack,” Ghazi said. “It has to happen at the entire stack, from silicon to systems.”
Higher long-term growth targets Synopsys said it expects overall revenue to grow at a mid-teens compound annual rate through fiscal 2030. The outlook includes mid-teens growth in EDA, double-digit growth in simulation and analysis, and high-teens growth in design IP.
Synopsys: Long-Term Opportunity Outweighs Near-Term HeadwindsFor fiscal 2027, the company forecast revenue growth of 15% to $11.15 billion at the midpoint. It expects non-GAAP operating margin to expand 250 basis points to 44%, non-GAAP earnings per share to rise 27% to $19.08, and free cash flow to reach approximately $3.1 billion.
Chief Financial Officer Shelagh Glaser said Synopsys expects operating margin to approach 50% by fiscal 2030, up from its prior target in the mid-40% range. The company also expects EPS and free cash flow to grow in the mid-20% range over the long term.
Synopsys said it intends to return up to 50% of free cash flow to shareholders and announced plans to repurchase $1 billion of its shares over the coming months. The company is targeting stock-based compensation equal to 8% of revenue by fiscal 2030.
Application-optimized IP strategy A central element of the company’s outlook is its expansion into application-optimized IP, or AOIP. Ghazi described the model as a second “factory” alongside Synopsys’ traditional standard-based IP business.
Under the traditional model, Synopsys develops IP based on industry standards and licenses it broadly. The newer model involves working earlier with customers to customize IP around specific workloads and system requirements. That model includes license fees, customization fees and royalties when customer products enter production.
Ghazi said Synopsys has signed multiyear, multigeneration agreements with compute, ASIC and connectivity leaders. He highlighted a $1 billion license-fee agreement covering multiple generations of Amazon’s Graviton, Trainium and Nitro products. The $1 billion figure excludes customization fees and royalties, he said.
Synopsys projects that AOIP revenue will reach $1 billion by 2030 based on current customer contracts and commitments. The company said it expects royalty revenue eventually to exceed license revenue within the business, though it does not expect royalty revenue from the Amazon-related programs in fiscal 2027.
Ghazi said the broader model can create opportunities across Synopsys’ portfolio, including IP, EDA and simulation tools, because customized systems require analysis of factors such as packaging, thermal performance, stress and cooling.
AI platform and OpenAI partnership Synopsys also outlined its agentic AI strategy, branded as the Synopsys Agentic AI Platform, or Autopilot. Chief Product Development Officer Shankar Krishnamoorthy said the platform is designed to let long-horizon AI agents perform engineering tasks across chip implementation, verification, analog design and physics simulation.
Krishnamoorthy said the agents can decompose higher-level engineering objectives into tool calls and task-level workflows while relying on Synopsys’ physics-based engines and sign-off tools for validation. He said the company has more than 50 customer engagements involving its agentic portfolio, including work with Intel, MediaTek, Samsung Memory and NVIDIA.
Ghazi said Synopsys sees AI as an expansion opportunity rather than a replacement threat for EDA. While AI models can reason, explore and recommend designs, he said, EDA tools remain necessary to generate chip layouts and validate them against manufacturing and physics requirements.
The company announced a multiyear partnership with OpenAI to develop a specialized Synopsys.ai Copilot model. According to Ghazi, the model will be post-trained using Synopsys tools, agents, workflows and engineering knowledge, while OpenAI provides frontier-model intelligence and reasoning capabilities.
OpenAI President and Chairman Greg Brockman said the partnership is intended to help engineers explore more design choices, optimize design targets and shorten chip-development cycles. Synopsys said customers will be able to access the offering as a service, with monetization involving subscriptions, consumption-based tool usage and outcome-based revenue sharing.
Ansys synergies and reporting changes Glaser said Synopsys remains on track to achieve $400 million in annualized revenue synergies from its Ansys acquisition by fiscal 2029. The company expects more than $100 million in annualized revenue synergies as it exits fiscal 2027, as multi-physics fusion products begin contributing revenue.
Synopsys also said it expects to complete its targeted $400 million in annualized cost synergies in fiscal 2027, one year ahead of its prior fiscal 2028 target.
Beginning in fiscal 2027, the company will move Ansys’ semiconductor business unit into EDA reporting, while the remaining Ansys operations will be presented within Simulation & Analysis. Design IP reporting will remain unchanged.
About Synopsys (NASDAQ:SNPS)Synopsys, Inc is a technology company that develops electronic design automation (EDA) software, semiconductor intellectual property (IP), and software tools used to design, verify, and manufacture advanced electronic systems. Its solutions support the development of semiconductors, systems-on-chip, and electronic products across the design cycle, from initial specification and architecture through testing and production.
The company's offerings include digital and custom integrated-circuit design tools, simulation and verification software, physical design and signoff products, and semiconductor IP such as processor cores, interface technologies, and foundational components.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].
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Synopsys (SNPS +4.78%), a company that offers electronic design automation (EDA) solutions used in the design and testing of semiconductors, had a fine Hump Day on the stock market. That's largely because it announced not one but two new cooperation agreements with powerful partners. Not surprisingly, its stock flew almost 5% higher that day.
Partnering up One of the deals is with prominent artificial intelligence (AI) developer OpenAI, the company behind the enduringly popular ChatGPT model. Synopsys and OpenAI have formed a strategic partnership to develop a new model, sensibly titled GPT-Synopsys, that will use Synopsys' EDA tools to aid semiconductor design.
Image source: Getty Images.
As part of this pact, the two companies have agreed to a revenue-sharing arrangement, although details of this were not provided. Synopsys and OpenAI will also collaborate in the marketing of GPT-Synopsys.
The second contract is with retail and cloud computing giant Amazon. In Synopsys' words, the multi-year, $1 billion-plus arrangement aims to "accelerate Amazon's custom silicon innovation and advance the development of increasingly complex AI-powered products and cloud infrastructure."
Synopsys added that it is adopting Amazon's cloud storage services and the company's Bedrock AI development platform to support its efforts to further integrate AI into its solutions.
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Silicon strength Synopsys' partnering with two very well-known names in important AI initiatives bolsters its position significantly. Although it's still fuzzy how the pair will affect its fundamentals, they ally the highly specialized tech company with businesses that can be powerful partners for quite some time (assuming these projects go relatively smoothly).
I think the investor bullishness in response to these news pieces was entirely justified, and Synopsys remains an exciting company to watch.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Synopsys. The Motley Fool has a disclosure policy.
Synopsys, Inc. (SNPS) Analyst/Investor Day September 30, 2026 1:00 PM EDT
Company Participants
Tushar Jain - Head of Investor Relations
Sassine Ghazi - CEO, President & Director
Shankar Krishnamoorthy - Chief Product Development Officer
Shelagh Glaser - Chief Financial Officer
Conference Call Participants
Lip-Bu Tan - Intel Corporation
Jin Han - Samsung Electronics Co., Ltd.
Greg Brockman - OpenAI, L.L.C.
Sitikantha Panigrahi - Mizuho Securities USA LLC, Research Division
James Schneider - Goldman Sachs Group, Inc., Research Division
Vivek Arya - BofA Securities, Research Division
Jay Vleeschhouwer - Griffin Securities, Inc., Research Division
Joshua Tilton - Wolfe Research, LLC
Jason Celino - KeyBanc Capital Markets Inc., Research Division
Lee Simpson - Morgan Stanley, Research Division
Andrew DeGasperi - BNP Paribas, Research Division
Yu Shi - Needham & Company, LLC, Research Division
Ashish Bhandari - Throughline Capital, LLC
Gary Mobley - StoneX Group Inc.
Presentation
Operator
Welcome to Synopsys Investor Day. [Operator Instructions] Today's program is being recorded and webcast live. Please welcome Tushar Jain, Vice President, Synopsys Investor Relations.
Tushar Jain
Head of Investor Relations
Thank you. Thank you, everyone. Good afternoon, and welcome to Synopsys Investor Day. We're so glad to have you here. It's great to see so many familiar faces in person rather than on Zoom. It's a very exciting day for all of us here at Synopsys, and we thank you for joining us in person and for those joining us online.
Before I go any further, I need to read a short legal disclosure. Synopsys will discuss forecasts, targets and other forward-looking statements during today's presentation. While these statements represent our best judgment as of today, they are subject to risks and uncertainties that could cause actual results to differ materially. Important factors that may affect our future results are described in our most recent SEC filings.
We will refer to certain non-GAAP financial measures throughout today's presentation, and reconciliations
OpenAI and Synopsys Announce GPT-Synopsys: Frontier Intelligence to Revolutionize Chip DesignPR Newswire
SAN FRANCISCO and SUNNYVALE, Calif., Sept. 30, 2026
Companies form strategic partnership to dramatically advance and accelerate semiconductor innovation
News Highlights:
Companies sign multi-year agreement to collaborate as preferred partners to develop and deliver GPT-Synopsys, a specialized model for chip design that brings together OpenAI's frontier AI with Synopsys' trusted EDA tools and chip design expertiseOpenAI to license Synopsys' trusted electronic design automation (EDA) tools for development of the specialized modelSynopsys & OpenAI to closely collaborate on R&D and joint go-to-market initiatives with a shared revenue framework, /PRNewswire/ -- Synopsys (Nasdaq: SNPS) and OpenAI today announced a strategic partnership that brings together OpenAI's advanced AI capabilities with Synopsys' industry-leading EDA tools and agentic AI capabilities to revolutionize the design of semiconductors. The companies signed an expansive, multi-year agreement to jointly develop GPT-Synopsys, a specialized model, optimized to use Synopsys EDA tools to perform semiconductor design workflows. The agreement includes a revenue sharing arrangement and go-to-market collaboration to jointly make GPT-Synopsys available to customers worldwide.
Today, agentic AI technologies connect general-purpose models to EDA tools to run chip-design workflows. The next leap, with this partnership, is to make frontier models experts in using EDA tools: learning to run the tools as expert engineers, interpreting their outputs, and iteratively optimizing designs using the tools. This integration will make the model a native expert user and enable engineers to explore more design alternatives and optimize power, performance and area (PPA) to rapidly deliver more sophisticated designs.
"The future of semiconductor engineering requires dramatic acceleration of the chip design process without compromising PPA or first-time-right silicon. This agreement will expand access to Synopsys' advanced design capabilities and the underlying, ground-truth engineering tools required to bring increasingly complex chips to market," said Sassine Ghazi, president and CEO of Synopsys. "Together with OpenAI, we're bringing frontier intelligence to chip design to help more companies develop and accelerate advanced silicon, while maintaining the rigor and trust required for manufacturing success."
"We're using our most advanced technology to improve the systems that power AI," said Greg Brockman, president and co-founder of OpenAI. "With Synopsys, we're bringing that work to chip design, helping engineers explore more designs and get to a working chip faster. By helping them build better chips, we can build better AI and bring it to more people."
GPT-Synopsys to Revolutionize AI-native Chip Design
GPT-Synopsys brings together OpenAI frontier models with Synopsys' EDA technology and domain expertise, enabling the specialized model to reason about chip design and verification, and to directly operate Synopsys' tools. Engineers will delegate design objectives—from PPA optimization to timing and verification closure—with agents running tools, interpreting results, implementing changes, and iterating toward verified outcomes for engineer review. GPT-Synopsys will run on OpenAI-hosted infrastructure, will be designed to interoperate with customer agent harness systems, and will be deeply integrated with Synopsys.ai and the Synopsys Autopilot, agentic AI platform. Early technology engagements are underway with leading semiconductor customers.
The joint service offering will provide the bundled compute, model, and licenses, while ensuring customer-specific design data is protected. GPT-Synopsys will feature enterprise-grade security, governance, and access controls. Customer data is not used to train the model, is encrypted at rest and in transit, and can be managed through configurable retention, audit and permission controls.
About Synopsys
Synopsys, Inc. (Nasdaq: SNPS) is the leader in engineering solutions from silicon to systems, enabling customers to rapidly innovate AI-powered products. We deliver industry-leading silicon design, IP, simulation and analysis solutions, and design services. We partner closely with customers across a broad range of industries to maximize their R&D capability and productivity, powering innovation today that ignites the ingenuity of tomorrow. Learn more at www.synopsys.com.
Forward-Looking Statements
This press release contains forward-looking statements, including, but not limited to, statements regarding the development, capabilities, timing, availability, and anticipated benefits of GPT-Synopsys as well as Synopsys and OpenAI's strategic partnership. These statements involve risks, uncertainties and other factors that could cause our actual results, time frames, or achievements to differ materially from those expressed or implied in such forward-looking statements. Information on potential risks, uncertainties and other factors that could affect Synopsys' results is included in filings we make with the SEC from time to time, including in the sections entitled "Risk Factors" in our latest Annual Report on Form 10-K and in our latest Quarterly Report on Form 10-Q. Synopsys undertakes no duty, and does not intend, to update any forward-looking statement provided in this press release, whether as a result of new information, future events or otherwise, unless required by law.
Synopsys Media Relations
Cara Walker
[email protected]
[email protected]
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Synopsys (SNPS.O), a maker of software used in designing computing chips, said on Wednesday that it has struck a deal to share revenue with OpenAI as the two develop an AI model for the chip business.
GPT-Synopsys, as the model will be called, will be specifically trained and tuned to take on chip design tasks, which start with a description of the chip's circuits in a code-like language and span to determining how to lay out billions of transistors on a small square of silicon.
OpenAI's model will learn how to use Synopsys software tools to help engineers work through the various trade-offs and optimizations that happen during the design process "to be able to shave off weeks, months from the design process and to bring more chips to the world," OpenAI co-founder Greg Brockman said in a video announcing the news.
Synopsys announced the deal at an investor summit where Synopsys CEO Sassine Ghazi also said the company now expects 15% revenue growth for its fiscal 2027, which was above analyst estimates of 11.19% growth, according to LSEG data. Shares rose as much as 7% after the partnership and forecast announcement.
Ghazi told Reuters in an interview that OpenAI will pay Synopsys a training subscription fee for learning to use Synopsys tools. When Synopsys customers use the product, Synopsys and OpenAI will share revenue based on how well the model improves the design of a chip.
"We structured the agreement in a way that it will not be cannibalizing our business," Ghazi said. "It will be an upside to our business given we're delivering more value to the customer."
Ghazi said that the GPT-Synopsys model's work will still be double-checked by Synopsys tools that use traditional computing techniques to verify whether a chip will work.
"The model needs these guardrails in order to check the physics," Ghazi said. "The need for validating with the highest level of fidelity, what we call sign-off or ground truth, is essential."
Leading portfolio of engineering solutions positions Synopsys to capitalize on the continued expansion of digital and physical AI and the AI-driven transformation of engineering. Updates long-term growth targets to reflect accelerating revenue and expanding non-GAAP operating margins. Company expects fiscal year 2027 revenue growth of approximately 15% year over year to $11.15 billion at the midpoint of guidance range. After investing in the business, Synopsys expects to return up to 50% of free cash flow to shareholders via share repurchases; with intent to repurchase approximately $1 billion in shares over the coming months, subject to market conditions. , /PRNewswire/ -- Synopsys, Inc. (NASDAQ: SNPS) today detailed its long-term growth strategy and sustainable long-term financial model at its 2026 Investor Day in New York. Management outlined how AI is driving demand, transforming engineering, unlocking new business models and accelerating growth across the portfolio. A replay of the presentation will be available on Synopsys' investor relations website.
Synopsys headquarters in Sunnyvale, Calif. Synopsys President and CEO, Sassine Ghazi, said: "AI is creating multiple, reinforcing growth engines for Synopsys. The acceleration of frontier intelligence is fueling an unprecedented demand for compute power while increasing system complexity. Simultaneously, purpose-built silicon is reshaping the IP market, while Physical AI and agentic workflows are driving deeper integration of our trusted tools. Together, these forces are expanding our addressable market, increasing consumption of our technology, and creating new, recurring revenue streams."
Highlights from executive presentations include:
Silicon IP Business Expands to Serve Growing Demand for Special-purpose Silicon
Synopsys is expanding beyond traditional standards-based IP into application-optimized IP (AOIP), helping customers develop differentiated silicon tailored to specific workloads and system architectures. As AI drives demand for custom silicon across hyperscalers and system companies, Synopsys is leveraging its interface IP leadership, system expertise, and engineering scale to deliver optimized IP subsystems and platforms that accelerate time-to-market while improving performance and efficiency.
This 'Factory 2' IP model expands Synopsys' value capture per design win and increases its participation in the long-term growth of custom silicon and AI infrastructure. Demonstrating early momentum for the new IP business model, the company has secured multiple AOIP customers spanning compute, ASIC, and AI connectivity architectures. This includes an IP agreement with Amazon, which was announced today.
Powering the Next Frontier of AI-Driven Design
Ghazi today also explained the company's strategy to create and capture value in the delivery of AI-powered engineering solutions and announced a groundbreaking partnership with OpenAI to collaborate as preferred partners to develop and deliver GPT-Synopsys, a specialized model for chip design that brings together OpenAI's frontier AI with Synopsys' trusted EDA tools and chip design expertise.
Synopsys is advancing the next frontier of AI-driven design and simulation with a strategy that enables customers to adopt its agentic AI portfolio in the way that best fits their engineering environment. Customers can deploy the full Synopsys Autopilot platform, integrate Synopsys agents into their own AI platforms, or leverage frontier AI models optimized for specialized engineering workflows. Across all approaches, Synopsys provides the trusted engineering context, domain-specific agents, and ground-truth execution engines that power the development of the world's most advanced products. This flexible model expands Synopsys' opportunity to participate across the emerging AI engineering ecosystem while creating multiple avenues to monetize AI-driven engineering through a combination of subscription and consumption-based models across tools, agents and platform.
Synopsys Fiscal 2027 and Long-term Financial Outlook
Synopsys provided financial guidance for fiscal year 2027 and a comprehensive multi-year financial framework through fiscal year 2030. The company also announced its intent to repurchase approximately $1 billion of Synopsys shares over the coming months, subject to market conditions, underscoring confidence in its long-term cash generation.
Shelagh Glaser, Synopsys CFO, said, "Our updated financial framework reflects confidence in both our growth trajectory and our ability to scale efficiently while helping customers re-engineer their engineering to accelerate AI-powered products. We remain focused on disciplined execution, converting growth into expanding margins and strong free cash flow, while continuing to invest in innovation and deliver sustainable long-term value for our shareholders."
The company's updated long-term targets and fiscal year 2027 outlook are provided below:
Our long-term, FY26E - FY30E objectives (1)
Revenue
Operating Margin
Free Cash Flow (2)
Company (2)
Long-term non-GAAP
Free Cash Flow Growth
Mid-Teens growth ~15%
FY30E operating margin ~50%
in the Mid 20%'s
Design Automation (2)
Earnings (2)
Capital Return(3)
EDA: Mid-Teens: 13%+
Non-GAAP EPS growth
Up to 50%
S&A: Double-Digit: 10%+
in the Mid 20%s
of Free Cash Flow
Design IP (2)
via share repurchases
High-Teens: 17%+
(1) These multi-year objectives are provided as of September 30, 2026. See below for additional information regarding these forward-looking non-GAAP measures, including reconciliations to the most comparable GAAP measures to the extent available without unreasonable efforts
(2) FY26E - FY30E Growth CAGR
(3) Capital allocation objectives are based on current business outlook and may vary based on market conditions, strategic opportunities, and balance sheet priorities
Full Fiscal Year 2027 Financial Targets
(in millions, except per share amounts)
Range for Fiscal Year Ending
October 31, 2027
Low
High
Revenue
$11,100
$11,200
GAAP Expenses
$8,765
$8,905
Non-GAAP Expenses
$6,215
$6,275
Non-GAAP Interest and Other Income (Expense), net
($465)
($455)
Non-GAAP Tax Rate
18 %
18 %
Outstanding Shares (fully diluted)
190
192
GAAP Operating Margin
Midpt: ~20.7%
Non-GAAP Operating Margin
Midpt: ~44.0%
GAAP EPS
$8.16
$8.61
Non-GAAP EPS
$19.04
$19.12
Operating Cash Flow
~$3,600
Free Cash Flow (1)
~$3,100
Capital Expenditures
~$500
(1) Free cash flow is calculated as cash provided from operating activities less capital expenditures
GAAP to Non-GAAP Reconciliation of Full Fiscal Year 2027 Targets
(in thousands, except per share data)
Range for Fiscal Year
Ending October 31, 2027
Low
High
Target GAAP expenses
$ 8,765,000
$ 8,905,000
Adjustments:
Amortization of acquired intangible assets
(1,540,000)
(1,550,000)
Stock-based compensation
(960,000)
(980,000)
Restructuring charges
(50,000)
(100,000)
Target non-GAAP expenses
$ 6,215,000
$ 6,275,000
Range for Fiscal Year
Ending October 31, 2027
Low
High
Target GAAP earnings per diluted share attributed to Synopsys
$ 8.16
$ 8.61
Adjustments:
Amortization of acquired intangible assets
$ 8.12
$ 8.06
Stock-based compensation
$ 5.13
$ 5.03
Restructuring charges
$ 0.52
$ 0.26
Tax adjustments and settlement
$ (2.89)
$ (2.84)
Target non-GAAP earnings per diluted share attributed to Synopsys
$ 19.04
$ 19.12
Shares used in non-GAAP calculation (midpoint of target range)
191,000
191,000
GAAP to Non-GAAP Reconciliation of Operating Margin at Midpoint of Full Fiscal Year 2027 Targets
Twelve Months Ending
October 31, 2027
At midpoint of revenue and expense guidance ranges
GAAP operating margin
20.7 %
Amortization of acquired intangible assets
13.9 %
Stock-based compensation
8.7 %
Restructuring charges
0.7 %
Target non-GAAP operating margin
44.0 %
Presentations and the webcast replay from today's Synopsys 2026 Investor Day are available at: https://investor.synopsys.com/.
Forward Looking Statements
Certain statements contained herein and in our investor conference call contain forward-looking statements within the meaning of the federal securities laws, including, but not limited to, statements concerning our anticipated financial performance, guidance, long-term financial objectives and projections; anticipated synergies and other benefits; capital allocation plans, including planned share repurchases; revenue growth objectives and the expected timing and pace of realization; operating margin expansion objectives; customer demand, market opportunities and industry trends, including the anticipated impact of artificial intelligence; products, services, technologies, business offerings and models, strategies, and anticipated product performance and customer benefits; partnerships and customer agreements; and our operating structure and growth strategy. These forward-looking statements generally are identified by the words "believe," "project," "expect," "anticipate," "estimate," "intend," "strategy," "future," "opportunity," "plan," "may," "should," "will," "would," "will be," "will continue," "will likely result," and similar expressions or the negatives of these words or other comparable terminology to convey uncertainty of future events or outcomes. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties.
Many risks, uncertainties and other factors that could cause Synopsys' actual future events to differ materially from any future results, time frames, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to: (i) macroeconomic conditions and geopolitical uncertainty in the global economy; (ii) uncertainty in the growth of the semiconductor and electronics industries; (iii) the highly competitive industry in which we operate; (iv) actions by the U.S. or foreign governments, such as the imposition of additional export restrictions or tariffs; (v) consolidation among our customers and our dependence on a relatively small number of large customers; (vi) risks and compliance obligations relating to the global nature of our operations; (vii) failure to realize the benefits expected from the transactions we complete, including the acquisition of ANSYS, Inc. ("Ansys"), or unexpected difficulties or expenditures arising therefrom; (viii) risks related to inaccuracies in, or failures to achieve, our operational and business metrics or forecasts of growth; and (ix) other risks and uncertainties described in our filings with the SEC. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements.
Additional information on potential risks, uncertainties and other factors that could affect Synopsys' results is included in filings we make with the SEC from time to time, including in the sections entitled "Risk Factors" in our latest Annual Report on Form 10-K and in our latest Quarterly Report on Form 10-Q. The financial information contained in this press release should be read in conjunction with the consolidated financial statements and notes thereto included in Synopsys' most recent reports on Forms 10-K and 10-Q, each as may be amended from time to time. All forward-looking statements by their nature address matters that involve risks and uncertainties, many of which are beyond Synopsys' control, and are not guarantees of future results. Readers are cautioned not to put undue reliance on forward-looking statements, and Synopsys gives no assurances that it will achieve its expectations.
GAAP to Non-GAAP Reconciliations
This press release contains certain forward-looking financial measures that are not in accordance with the U.S. generally accepted accounting principles ("GAAP"). It also includes future estimates for non-GAAP operating margin, non-GAAP tax rate, non-GAAP interest and other income (expense), net, non-GAAP expenses, non-GAAP earnings per diluted share ("EPS"), non-GAAP EPS compound annual growth rate ("CAGR"), free cash flow ("FCF") and FCF CAGR.
FCF is calculated as cash provided from operating activities less capital expenditures FCF CAGR is calculated as the average annual growth rate of FCF over a period of time Non-GAAP EPS is calculated as GAAP net income excluding amortization of acquired intangible assets, stock-based compensation, restructuring charges, acquisition/divestiture-related items, loss on sale of strategic investments, and legal matters, adjusted for the difference between GAAP and non-GAAP tax rates, divided by fully diluted outstanding shares Non-GAAP EPS CAGR is calculated as the average annual growth rate of non-GAAP EPS over a period of time Non-GAAP expenses are calculated as GAAP expenses, excluding amortization of acquired intangible assets, stock-based compensation, restructuring charges, and acquisition/divestiture-related items Non-GAAP operating margin is non-GAAP operating income for a period divided by revenue for the same period Non-GAAP tax rate is set at a three-year normalized tax rate of 18.0%. In projecting this rate, we evaluated our historical and projected mix of U.S. and international profit before tax, excluding the impact of stock-based compensation, the amortization of purchased intangibles and other GAAP only adjustments. Non-GAAP interest and other income (expense), net is calculated as GAAP interest and other income (expense), net adjusted for the change in fair value of our non-qualified deferred compensation plan Synopsys continues to provide all information required in accordance with GAAP but acknowledges evaluating its ongoing operating results may not be as useful if an investor is limited to reviewing only GAAP financial measures. Accordingly, Synopsys presents non-GAAP financial measures in reporting its financial results to provide investors with an additional tool to evaluate Synopsys' operating results in a manner that focuses on what Synopsys believes to be its core business operations and what Synopsys uses to evaluate its business operations and for internal budgeting and resource allocation purposes. These non-GAAP financial measures may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles, and management exercises judgment in determining which items should be excluded in the calculation of non-GAAP measures. The presentation of non-GAAP financial information is not meant to be considered in isolation from, as superior to or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. These non-GAAP financial measures are meant to supplement, and be viewed in conjunction with, the corresponding GAAP financial measures.
Certain non-GAAP financial measures used by management, as well as the reconciliation of non-GAAP financial measures to their most closely applicable GAAP financial measures, is contained in this press release and in our investor conference call presentation available in the investor relations portion of Synopsys' corporate website at www.synopsys.com. Synopsys is unable to provide a full reconciliation of non-GAAP tax rate for FY 2027E; non-GAAP interest and other income (expense), net for FY 2027E; non-GAAP operating margin for FY 2028E-FY 2030E; non-GAAP EPS for FY 2028E-FY 2030E; non-GAAP EPS CAGR for FY 2026E-FY 2030E; FCF for FY 2028E-FY 2030E; and FCF CAGR for FY 2026E-FY 2030E projections, targets and guidance measures to the corresponding GAAP financial measures on a forward-looking basis because Synopsys believes that it would not be possible for it to have the information necessary to quantitatively reconcile such measures with sufficient precision without unreasonable efforts due to, among other things, the potential variability and limited predictability of the excluded adjustment items necessary for a full reconciliation such as certain acquisition/divestiture related items, tax deduction variability, changes in the fair value of non-qualified deferred compensation plan, and gains (losses) on the sale of strategic investments. For the same reasons, Synopsys is unable to address the probable significance of the unavailable information. Synopsys is presenting forward looking non-GAAP financial measures for illustrative purposes and may not report on this basis going forward.
Effectiveness of Information
The information provided herein is as of September 30, 2026. Although this press release is expected to remain available on Synopsys' website through the time Synopsys announces its results for the fourth quarter and fiscal year 2026, its continued availability through such time does not mean that Synopsys is reaffirming or confirming its continued validity. Synopsys undertakes no duty, and does not intend, to update any forward-looking statement, whether as a result of new information, future events or otherwise, unless required by law.
About Synopsys
Synopsys, Inc. (Nasdaq: SNPS) is the leader in engineering solutions from silicon to systems, enabling customers to rapidly innovate AI-powered products. We deliver industry-leading silicon design, IP, simulation and analysis solutions, and design services. We partner closely with our customers across a wide range of industries to maximize their R&D capability and productivity, powering innovation today that ignites the ingenuity of tomorrow. Learn more at www.synopsys.com.
Companies form strategic partnership to dramatically advance and accelerate semiconductor innovation
News Highlights:
Companies sign multi-year agreement to collaborate as preferred partners to develop and deliver GPT-Synopsys, a specialized model for chip design that brings together OpenAI's frontier AI with Synopsys' trusted EDA tools and chip design expertise OpenAI to license Synopsys' trusted electronic design automation (EDA) tools for development of the specialized model Synopsys & OpenAI to closely collaborate on R&D and joint go-to-market initiatives with a shared revenue framework , /PRNewswire/ -- Synopsys (Nasdaq: SNPS) and OpenAI today announced a strategic partnership that brings together OpenAI's advanced AI capabilities with Synopsys' industry-leading EDA tools and agentic AI capabilities to revolutionize the design of semiconductors. The companies signed an expansive, multi-year agreement to jointly develop GPT-Synopsys, a specialized model, optimized to use Synopsys EDA tools to perform semiconductor design workflows. The agreement includes a revenue sharing arrangement and go-to-market collaboration to jointly make GPT-Synopsys available to customers worldwide.
OpenAI and Synopsys Announce GPT-Synopsys: Frontier Intelligence to Revolutionize Chip Design Today, agentic AI technologies connect general-purpose models to EDA tools to run chip-design workflows. The next leap, with this partnership, is to make frontier models experts in using EDA tools: learning to run the tools as expert engineers, interpreting their outputs, and iteratively optimizing designs using the tools. This integration will make the model a native expert user and enable engineers to explore more design alternatives and optimize power, performance and area (PPA) to rapidly deliver more sophisticated designs.
"The future of semiconductor engineering requires dramatic acceleration of the chip design process without compromising PPA or first-time-right silicon. This agreement will expand access to Synopsys' advanced design capabilities and the underlying, ground-truth engineering tools required to bring increasingly complex chips to market," said Sassine Ghazi, president and CEO of Synopsys. "Together with OpenAI, we're bringing frontier intelligence to chip design to help more companies develop and accelerate advanced silicon, while maintaining the rigor and trust required for manufacturing success."
"We're using our most advanced technology to improve the systems that power AI," said Greg Brockman, president and co-founder of OpenAI. "With Synopsys, we're bringing that work to chip design, helping engineers explore more designs and get to a working chip faster. By helping them build better chips, we can build better AI and bring it to more people."
GPT-Synopsys to Revolutionize AI-native Chip Design
GPT-Synopsys brings together OpenAI frontier models with Synopsys' EDA technology and domain expertise, enabling the specialized model to reason about chip design and verification, and to directly operate Synopsys' tools. Engineers will delegate design objectives—from PPA optimization to timing and verification closure—with agents running tools, interpreting results, implementing changes, and iterating toward verified outcomes for engineer review. GPT-Synopsys will run on OpenAI-hosted infrastructure, will be designed to interoperate with customer agent harness systems, and will be deeply integrated with Synopsys.ai and the Synopsys Autopilot, agentic AI platform. Early technology engagements are underway with leading semiconductor customers.
The joint service offering will provide the bundled compute, model, and licenses, while ensuring customer-specific design data is protected. GPT-Synopsys will feature enterprise-grade security, governance, and access controls. Customer data is not used to train the model, is encrypted at rest and in transit, and can be managed through configurable retention, audit and permission controls.
About Synopsys
Synopsys, Inc. (Nasdaq: SNPS) is the leader in engineering solutions from silicon to systems, enabling customers to rapidly innovate AI-powered products. We deliver industry-leading silicon design, IP, simulation and analysis solutions, and design services. We partner closely with customers across a broad range of industries to maximize their R&D capability and productivity, powering innovation today that ignites the ingenuity of tomorrow. Learn more at www.synopsys.com.
Forward-Looking Statements
This press release contains forward-looking statements, including, but not limited to, statements regarding the development, capabilities, timing, availability, and anticipated benefits of GPT-Synopsys as well as Synopsys and OpenAI's strategic partnership. These statements involve risks, uncertainties and other factors that could cause our actual results, time frames, or achievements to differ materially from those expressed or implied in such forward-looking statements. Information on potential risks, uncertainties and other factors that could affect Synopsys' results is included in filings we make with the SEC from time to time, including in the sections entitled "Risk Factors" in our latest Annual Report on Form 10-K and in our latest Quarterly Report on Form 10-Q. Synopsys undertakes no duty, and does not intend, to update any forward-looking statement provided in this press release, whether as a result of new information, future events or otherwise, unless required by law.
Strategic engagement to accelerate the engineering of Amazon custom chips and AWS infrastructure using Synopsys' silicon IP and AI-powered engineering software solutions Multi-year, $1B+ agreement marks the expansion of Synopsys' silicon IP business to serve increasing demand for application-optimized IP while evolving to a license-plus-royalty business model that aims to deliver value to both companies as production volumes grow Synopsys to accelerate product development using AWS services and partner to optimize Synopsys' software on Trainium and Graviton Synopsys engineering will also adopt Amazon Elastic Compute Cloud (Amazon EC2) and Amazon Bedrock to accelerate its product development. , /PRNewswire/ -- Synopsys, Inc. (Nasdaq: SNPS) today announced a strategic agreement with Amazon to accelerate Amazon's custom silicon innovation and advance the development of increasingly complex AI-powered products and cloud infrastructure. The multi-year agreement marks the expansion of Synopsys' silicon IP business to serve increasing demand for application-optimized IP with Amazon as its lead customer.
Synopsys and Amazon Announce Strategic, Multi-year IP Agreement for Custom Silicon; Collaboration Also Extends to Cloud and AI-Powered Engineering Amazon continues to build on its leadership and longstanding investment in a broad portfolio of purpose-built chips, including Nitro for cloud security, network and storage, Graviton for general-purpose computing, and Trainium for AI training and inference workloads. Building on more than 15 years of collaboration, the agreement expands Amazon's use of Synopsys' IP to include application-optimized silicon IP. The agreement also expands Amazon's use of Synopsys EDA, simulation and analysis (S&A), and agentic AI technologies. Synopsys and Amazon will work to accelerate multiphysics solutions on Trainium and Graviton.
In addition, the companies plan to collaborate on applying AI across silicon-to-system engineering workflows. This includes deploying Synopsys' AI-powered EDA, physics-based simulation and agentic AI solutions, as well as developing custom agentic AI capabilities to help Amazon's engineering teams design, analyze, optimize, and validate complex chips and systems more efficiently.
"Amazon has invested in custom silicon for more than a decade, and it has fundamentally changed what's possible for AWS and our customers," said Peter DeSantis, SVP, foundational AI, custom silicon, quantum computing at Amazon. "From Graviton to Trainium, purpose-built chips deliver better performance at lower cost because they're designed for exactly what customers need. As our chip designs grow more ambitious and AI reshapes the engineering process itself, Synopsys helps us move faster across the design cycle, helping us deliver more capable, efficient computing for customers worldwide."
To accelerate its own IP and EDA tools development, Synopsys is adopting Amazon EC2 and cloud storage services, as well as Amazon Bedrock to build and deploy AI applications and agents to help innovate faster and scale its product offerings.
"Special purpose silicon is at the heart of AWS innovation. As we expand into application-optimized IP solutions, we're proud to have Amazon as our lead customer for this next phase of growth," said Sassine Ghazi, president and CEO of Synopsys. "More broadly, by combining Amazon's leadership in AI infrastructure and custom silicon with Synopsys' leadership in silicon IP, EDA and Multiphysics solutions, we can dramatically increase the productivity of our teams and shape the future of AI-native engineering."
About Synopsys
Synopsys, Inc. (Nasdaq: SNPS) is the leader in engineering solutions from silicon to systems, enabling customers to rapidly innovate AI-powered products. We deliver industry-leading silicon design, IP, simulation and analysis solutions, and design services. We partner closely with our customers across a wide range of industries to maximize their R&D capability and productivity, powering innovation today that ignites the ingenuity of tomorrow. Learn more at www.synopsys.com.
Forward-Looking Statements
This press release contains forward-looking statements, including, but not limited to, statements regarding the strategic multi-year agreement between Synopsys and Amazon and its anticipated benefits, future business and technology opportunities, growth initiatives, product development and innovation, and expected future results and outcomes. These statements involve risks, uncertainties and other factors that could cause our actual results, time frames, or achievements to differ materially from those expressed or implied in such forward-looking statements. Information on potential risks, uncertainties and other factors that could affect Synopsys' results is included in filings we make with the SEC from time to time, including in the sections entitled "Risk Factors" in our latest Annual Report on Form 10-K and in our latest Quarterly Report on Form 10-Q. Synopsys undertakes no duty, and does not intend, to update any forward-looking statement provided in this press release, whether as a result of new information, future events or otherwise, unless required by law.
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Synopsys (SNPS.O) and Amazon Web Services on Wednesday said that Amazon.com's (AMZN.O) cloud computing unit has entered a multi-year deal worth more than $1 billion to license chip design intellectual property from Synopsys.
Synopsys makes software for designing complex computer chips, helping firms such as Nvidia (NVDA.O) and Intel (INTC.O) decide how to lay out tens of billions of transistors on a few square millimeters of silicon. But it also increasingly licenses blueprints for parts of a chip, a business that brought in $1.75 billion in revenue in its most recent fiscal year and where it competes against Arm Holdings (O9Ty.F).
In its early stages, the Synopsys design licensing business focused on common parts of chips where customers found it more cost-effective to license blueprints from Synopsys than to design those parts from scratch. But Synopsys has moved into more complex designs such as computing cores and said the deal on Wednesday will focus on blueprints optimized for specific types of chips.
AWS designs a variety of its own chips, including its Graviton central processors and its Trainium AI chips. The two parties did not specify which AWS chips will use Synopsys blueprints.
As part of the deal, Synopsys will also adopt AWS computing and storage services, as well as Amazon Bedrock to build and deploy AI applications.
Synopsys software sits inside nearly every advanced AI chip on the market, yet the stock trades at a fraction of its closest rival's multiple. Here is why analysts and our model see a significant gap between where shares are and…
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Synopsys (NASDAQ:SNPS | SNPS Price Prediction) has a hand in nearly every advanced AI chip, because its software designs and tests them. Even so, it gets far less attention than the chipmakers it serves.
Shares closed at $425.76. The price target from 24/7 Wall St. is $549.97, which implies 29.17% upside over the next 12 months. SNPS wins a buy rating from our model with high confidence.
24/7 Wall St. Price Target Summary Metric Value Current Price $425.76 Price Target from 24/7 Wall St. $549.97 Upside/Downside 29.17% Recommendation BUY Confidence Level 90% The high confidence reflects steady earnings beats, a raised outlook, and 76% bullish analyst coverage. Investor Day on September 30 is the next catalyst.
A 10.6% Weekly Jump Puts the 2026 Slide in Question Shares rose 10.6% over the past week and 3.84% over the past month, though they remain down 9.36% year to date and about 21% below the 52-week high of $539.48.
Two catalysts drove the rally: an agentic AI partnership with TSMC (NYSE:TSM) announced on September 23, and an analyst upgrade reported two days later.
In fiscal Q3, revenue came in at $2.48B, up 42.4% year over year and ahead of the $2.44B consensus. Non-GAAP EPS of $3.91 beat the $3.67 estimate. Management then raised full-year non-GAAP EPS guidance to $15.04 to $15.10.
Why Bulls See $583 Within Reach Silicon-to-systems: Multiphysics Fusion uses Synopsys and Ansys technology. Customers validated up to 10x faster design closure, and the product should start adding to EDA growth in 2027. AI interface IP: Synopsys won more than 95% of PCIe 7 opportunities, and its die-to-die business is on pace to double. Royalties: The Factory Two effort aims to move custom silicon deals from license fees alone to license plus royalty. Of the analysts covering the stock, 16 rate it a buy and 3 a strong buy. Their consensus target is $553.77. The bull case has the stock reaching $583.
What Could Drag Shares Toward $482.87 EDA revenue grew just 8.5% in Q3 versus 16% last year, though management expects double-digit Q4 growth. Total debt is near $10 billion with $2.6 billion in projected free cash flow.
On a GAAP basis, the stock trades at 74x earnings, expanded by Ansys amortization. China export controls and Design IP litigation add risk. The bear case of $482.87 still is above today’s price.
Synopsys Trades Cheaper Than Its Closest Rival Company Forward P/E Quarterly Revenue Growth YoY Synopsys 23x 42.4% Cadence 32x 24.2% Keysight 22x 36.5% Cadence (NASDAQ:CDNS) is the other half of the EDA duopoly. The stock changes hands at 32x forward earnings and runs a TTM operating margin of 28.6%. Synopsys would reach our target at a multiple still below Cadence’s.
Keysight (NYSE:KEYS) is a useful comparison because it also sells design and test tools into AI hardware. At 22x forward earnings, it trades in line with Synopsys. Measured against these two peers, the 24/7 Wall St. price target looks reasonable and possibly conservative.
Our Verdict: AI Demand Outweighs Integration Risk Our $549.97 target carries a buy rating and high confidence. A discounted multiple coupled with rising guidance supports the case.
Investor Day confirmation of double-digit EDA growth and royalty-based Factory Two deals would strengthen it. Synopsys remains one of the most overlooked ways to own the AI expansion.
Year Price Target from 24/7 Wall St. 2026 $463.28 2027 $583.76 2028 $670.67 2029 $774.39 2030 $832.24 These estimates assume continued execution of the silicon-to-systems strategy. Ansys synergies and agentic AI licensing could drive results higher; a slowdown in AI design starts could pull them lower.
Synopsys is one path into the AI expansion that skips the chipmakers entirely, and we identified seven more of those overlooked suppliers in a free report on the companies powering the AI boom.
Contact [email protected] for any questions or corrections.
Open and Secure Synopsys Autopilot Platform Accelerates Engineering Productivity, Improves Design Quality, and Achieves Faster Closure Across Silicon to Systems
Key Highlights
Synopsys Autopilot™ Platform includes a broad portfolio of domain-specific AgentEngineer™ solutions, long-horizon agents that reason, plan, and execute with the support of task agents across silicon to systems workflows The Platform's context intelligence combines trusted engineering expertise with reusable skills and persistent memory to guide workflows with greater accuracy Open, secure architecture provides customer choice across Synopsys, partner, and third-party models, infrastructure, tools, and agents Demonstrated results by market leaders include up to 50x faster verification closure, 20% higher coverage, 30% productivity boost, 2x better token efficiency, and lower latency , /PRNewswire/ -- Synopsys, Inc. (Nasdaq: SNPS) today announced Synopsys AgentEngineer™ solutions, the industry's broadest portfolio of domain-specific long-horizon agents that can reason, plan, and execute complete engineering workflows from silicon to systems across verification, system validation, implementation, analog, manufacturing, and simulation and analysis domains. Built on the Synopsys Autopilot™ Platform, a comprehensive, open, and secure foundation for autonomous engineering, these agents help teams accelerate engineering productivity, improve design quality, and achieve faster closure across critical workflows while optimizing token efficiency and reducing latency.
Synopsys Powers Autonomous Engineering with a Broad Portfolio of Long-Horizon Agents and Autopilot Platform "Our customers are re-engineering their engineering workflows across semiconductor and systems products to keep pace with increasing system complexity and tight market windows," said Ravi Subramanian, Chief Product Management Officer at Synopsys. "Synopsys' portfolio of AgentEngineer solutions and the Autopilot Platform enable customers to accelerate their shift from AI-assisted design to autonomous engineering, built on trusted EDA and simulation and analysis engines."
Portfolio of Long-Horizon Agents Across Silicon-to-System Design
Synopsys AgentEngineer solutions bring long-horizon, domain-specific intelligence to critical engineering workflows supporting verification, implementation, analog, manufacturing, and simulation and analysis engineering domains in one unified platform environment.
In addition, task-level agents apply Synopsys engineering expertise to targeted execution, including autonomous coverage closure; software bring-up and validation; multi-die 3DIC assembly; PPA closure; analog layout synthesis and design migration; mask synthesis; combustion, resonance, and signal integrity; and other complex design tasks.
Together, these long-horizon and task-level agents deliver unmatched breadth and depth, enabling autonomous execution of cross-domain tasks. Their effectiveness is powered by deep engineering context, domain expertise, and workflow intelligence uniquely derived from Synopsys' industry-leading EDA and simulation and analysis ground-truth engines.
Built On Synopsys Autopilot Platform: A Trusted Foundation for Agentic Orchestration
The Synopsys Autopilot Platform provides orchestration, skills, memory, telemetry, and governance for autonomous engineering workflows. It creates a trusted environment for AI systems to coordinate activities, access design knowledge, execute actions, and maintain enterprise-grade security and control.
Built for Optionality: Enables customer choice across Synopsys, partner, and third-party infrastructure, models, data, agents, workflows, and ecosystem integrations, while preserving security and data integrity. Context Intelligence: Powered by Synopsys' cognitive model, combines deep domain engineering knowledge and tools, reusable skills, and persistent memory to help AI agents interpret design intent and guide workflows. Advanced Security & Data Management: Protects customer, partner, and Synopsys intellectual property through architecture flexibility, access controls, encryption, and runtime guardrails. Optimized for Efficiency: Uses privileged APIs and reasoning over proprietary context intelligence to deliver better results at significantly lower token cost/count and latency. Advancing Autonomous Engineering at Scale Industry Collaborations
Beyond automating individual tasks, the Synopsys Autopilot Platform helps engineering teams accelerate entire workflows from design through verification and systems development. Engagements with leading companies are validating the promise of autonomous engineering and demonstrating meaningful improvements in productivity, design quality, and workflow closure.
"As a fast-growing innovator developing next-generation processor architectures, we are continually looking for new ways to accelerate engineering execution and improve productivity across our design workflows," said Alon Mahl, VP of Verification, AheadComputing. "The Synopsys AgentEngineer technology extends AI beyond task assistance to help automate complex workflows and accelerate engineering execution. From RTL handoff through implementation, ECO, and signoff, the Synopsys Implementation AgentEngineer helped us reduce manual engineering effort and accelerate design convergence, enabling our engineering teams to focus more time on the differentiated aspects of our processor architecture."
"We achieved a 10–30% productivity boost in RTL code generation with Synopsys Verification AgentEngineer capabilities," said Toshio Yoshida, Senior Vice President and Head of the Advanced Computing Development Unit at Fujitsu. "This was driven by highly efficient generation of SystemVerilog assertions, wrapper modules, and parameterized modules, as well as code refactoring."
"Advancing the productivity and efficiency of our verification teams is critical as design complexity continues to increase across next-generation computing platforms," said Manoj Selva, Vice President, Product Enablement, Intel. "Our work with Synopsys Verification AgentEngineer technology highlights the promise of agentic AI for debug, enabling engineers to accelerate issue resolution across verification environments. We believe these advancements can help reduce verification bottlenecks, improve engineering efficiency, and accelerate the delivery of our silicon innovations."
"Our engineers have consistently pushed the boundaries of analog and mixed-signal design and are continuously looking for ways to dramatically enhance design and layout productivity," said Ching San Wu, Vice President of MediaTek. "Building on the successful deployment of Synopsys SmartFloorplanning Technology, we are continuing our collaboration with Synopsys on the Agentic AI AMS Platform, driving the next frontier of autonomous analog engineering flows. We believe this transformative technology will fundamentally reshape how our teams create, optimize, and implement complex AMS designs."
"Autonomous engineering requires AI agents that understand design intent, plan and execute complex workflows, and validate their results," said Tim Costa, Vice President and General Manager of Industrial and Computational Engineering at NVIDIA. "Synopsys is combining its silicon-to-systems expertise with NVIDIA accelerated computing and NVIDIA Agent Toolkit, including NVIDIA Nemotron models and the NVIDIA OpenShell secure runtime, to build long-running agents that help engineers improve design quality and accelerate development."
"Breakthroughs in AI increasingly depend on breakthroughs in memory: the industry calls for higher bandwidth, greater efficiency, and faster innovation cycles," said JY Choi, Executive Vice President and Head of Memory Design Technology at Samsung Electronics. "Synopsys agentic AI solutions are helping Samsung's engineering teams accelerate complex development workflows, allowing us to focus more effort on innovating the advanced memory technologies that power the next generation of AI infrastructure."
"As AI drives the shift to multi-die architectures with unprecedented power densities, increasingly complex power delivery networks demand new approaches for power integrity signoff," said Aveek Sarkar, Director of the Ecosystem and Alliance Management Division at TSMC. "Through our enduring partnership with Open Innovation Platform® (OIP) ecosystem partners like Synopsys, we are successfully enabling agentic AI-based solutions to accelerate critical power integrity analysis workflows. As advanced packaging designs rapidly grow in scale and complexity, these AI-based solutions significantly boost engineering productivity and enable groundbreaking designs for next-generation AI systems."
Availability and Resources
More than 50 engagements are underway with Synopsys AgentEngineer solutions and the Autopilot Platform, with general availability planned for the end of 2026.
For more information about Synopsys AgentEngineer solutions and the Autopilot Platform, visit: https://www.synopsys.com/ai/agentic-ai.
About Synopsys
Synopsys, Inc. (Nasdaq: SNPS) is the leader in engineering solutions from silicon to systems, enabling customers to rapidly innovate AI-powered products. We deliver industry-leading silicon design, IP, simulation and analysis solutions, and design services. We partner closely with our customers across a wide range of industries to maximize their R&D capability and productivity, powering innovation today that ignites the ingenuity of tomorrow. Learn more at www.synopsys.com.
Forward-Looking Statements
This press release contains forward-looking statements, including, but not limited to, statements concerning our expectations regarding certain of our solutions, including their anticipated performance and benefits, and the development of additional solutions and enhancements. These statements involve risks, uncertainties and other factors that could cause our actual results, time frames, or achievements to differ materially from those expressed or implied in such forward-looking statements. Information on potential risks, uncertainties and other factors that could affect Synopsys' results is included in filings we make with the SEC from time to time, including in the sections entitled "Risk Factors" in our latest Annual Report on Form 10-K and in our latest Quarterly Report on Form 10-Q.
Contacts
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Synopsys Inc. (NASDAQ:SNPS) shares are climbing Friday morning after a major Wall Street upgrade highlighted the electronic design automation provider’s expanding artificial intelligence tailwinds and improving risk-reward profile.
Here’s what investors need to know.
Synopsys stock is showing upward movement. What’s pushing SNPS stock higher? HSBC Upgrade and AI Growth TrajectoryThe stock’s upward momentum stems from an early-morning research note published on Friday by HSBC analyst Stephen Bersey, who upgraded Synopsys from a Hold to a Buy rating and raised his 12-month price target from $490 to $700. In his note, Bersey expressed a highly constructive view on the EDA sector, arguing that Synopsys is actively transforming its underlying operational profile.
Specifically, the analyst wrote that the firm is shifting from a “moderate-growth software provider to a high-growth company driven by advances in artificial intelligence.” The $700 target implies significant upside as AI-driven chip design complexity demands heavier utilization of Synopsys’s software ecosystem.
Moving Past the Ansys Integration OverhangBeyond the structural AI growth tailwind, Bersey’s note highlighted that the upgrade reflects a more favorable setup following the stock’s recent valuation pullbacks. The analyst pointed out that Synopsys shares had previously suffered a derating due to macro concerns surrounding the company’s revenue exposure to China, as well as the execution and regulatory risks associated with its massive integration of simulation software provider Ansys.
With those integration fears beginning to subside, evidenced by Synopsys recently rolling out Multiphysics Fusion, its first combined product offering with Ansys, HSBC views the prior multiple compression as overdone.
SNPS Shares Rise Friday MorningSNPS Price Action: Synopsys shares were up 1.74% at $432.32 at the time of publication on Friday, according to Benzinga Pro data.
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Synopsys (SNPS +1.01%) stock, which makes design and simulation software for pre-production work on semiconductors, jumped nearly 5% in early trading Thursday before reversing and giving back most of its gains. As of 11:15 a.m. ET, Synopsys is up only 1%.
But why did it pop in the first place at all?
Image source: Getty Images.
A brief description of why Wall Street loves Synopsys Synopsys reported powerful Q3 profits last month, with 42.5% sales growth driving GAAP earnings up 89%. CEO Sassine Ghazi said "unprecedented complexity" in AI chips is increasing the need for Synopsys's software.
Responding to the good news, two separate analysts upgraded the stock this week. BNP Paribas removed its underperform rating yesterday. Today, HSBC analyst Stephen Bersey went a step further, upgrading Synopsys to "buy" with a $700 price target.
Referring back to the CEO's comments, Bersey declared that Synopsys is "transforming into an AI beneficiary" as more complicated chips are designed to specialize in agentic AI. The analyst forecasts that Synopsys could earn $20.01 per share next fiscal year, and values those profits at 35x forward earnings, resulting in the $700 target price.
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What's next for Synopsys stock? Here's what you need to keep in mind when considering this forecast, though: It almost certainly refers to non-GAAP earnings. This year, most analysts have Synopsys pegged for only $4.08 per share in GAAP profit, but $15 per share in non-GAAP profit. Growth to $20.01 would therefore be about 33% annual growth on the non-GAAP side -- not an unreasonable target.
But GAAP profits will almost certainly be a lot lower than that. Applying a 33% growth rate to this year's forecast of $4.08, for example, would imply 2027 earnings of only $5.44 per share -- and an expensive 79x P/E ratio.
Caveat investor.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Synopsys. The Motley Fool has a disclosure policy.
