Track market-moving stories before they get noisy

Posted by Defense World Staff on Jul 25th, 2026

Aristotle Capital Management LLC decreased its holdings in Synopsys, Inc. (NASDAQ:SNPS – Free Report) by 2.3% during the first quarter, according to the company in its most recent disclosure with the Securities & Exchange Commission. The firm owned 1,849,326 shares of the semiconductor company’s stock after selling 44,237 shares during the period. Aristotle Capital Management LLC owned about 0.97% of Synopsys worth $733,252,000 as of its most recent filing with the Securities & Exchange Commission.

A number of other institutional investors have also modified their holdings of the stock. Sankala Group LLC bought a new position in Synopsys in the fourth quarter worth approximately $25,000. Thurston Springer Miller Herd & Titak Inc. bought a new position in shares of Synopsys during the 4th quarter worth $28,000. Caitong International Asset Management Co. Ltd purchased a new position in shares of Synopsys during the fourth quarter valued at $28,000. Atlas Capital Advisors Inc. bought a new stake in shares of Synopsys in the fourth quarter valued at about $32,000. Finally, Phillip James Consulting Co. purchased a new stake in Synopsys in the fourth quarter worth about $36,000. 85.47% of the stock is owned by hedge funds and other institutional investors.

Wall Street Analysts Forecast Growth SNPS has been the topic of a number of research reports. Citigroup raised their target price on shares of Synopsys from $600.00 to $610.00 and gave the company a “buy” rating in a research report on Thursday, May 28th. BNP Paribas Exane boosted their price objective on shares of Synopsys from $425.00 to $450.00 and gave the stock an “underperform” rating in a research note on Thursday, May 28th. Weiss Ratings restated a “hold (c-)” rating on shares of Synopsys in a report on Monday, June 8th. Bank of America upped their price objective on Synopsys from $515.00 to $600.00 and gave the stock a “buy” rating in a research note on Thursday, May 28th. Finally, Benchmark started coverage on Synopsys in a research report on Wednesday, July 15th. They set a “buy” rating and a $570.00 price objective on the stock. Two equities research analysts have rated the stock with a Strong Buy rating, ten have assigned a Buy rating, five have assigned a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat.com, the stock presently has an average rating of “Moderate Buy” and a consensus price target of $570.06.

Get Our Latest Stock Report on SNPS

Insiders Place Their Bets In related news, CFO Shelagh Glaser sold 3,394 shares of the company’s stock in a transaction dated Friday, June 12th. The stock was sold at an average price of $450.02, for a total value of $1,527,367.88. Following the completion of the transaction, the chief financial officer owned 14,358 shares of the company’s stock, valued at approximately $6,461,387.16. This represents a 19.12% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Sassine Ghazi sold 14,603 shares of the stock in a transaction that occurred on Monday, June 15th. The stock was sold at an average price of $458.96, for a total value of $6,702,192.88. Following the transaction, the chief executive officer owned 75,020 shares in the company, valued at $34,431,179.20. This represents a 16.29% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Corporate insiders own 0.56% of the company’s stock.

Synopsys Trading Down 0.0% Shares of Synopsys stock opened at $373.47 on Friday. The stock has a market cap of $71.51 billion, a PE ratio of 86.45, a price-to-earnings-growth ratio of 2.19 and a beta of 1.22. The firm has a fifty day moving average price of $456.13 and a 200 day moving average price of $455.25. Synopsys, Inc. has a 1 year low of $366.00 and a 1 year high of $651.73. The company has a debt-to-equity ratio of 0.33, a current ratio of 1.43 and a quick ratio of 1.32.

Synopsys (NASDAQ:SNPS – Get Free Report) last issued its quarterly earnings data on Wednesday, May 27th. The semiconductor company reported $3.35 earnings per share (EPS) for the quarter, beating the consensus estimate of $3.15 by $0.20. Synopsys had a return on equity of 5.83% and a net margin of 8.91%.The business had revenue of $2.28 billion during the quarter, compared to analysts’ expectations of $2.25 billion. During the same quarter in the previous year, the firm posted $3.67 EPS. The company’s revenue for the quarter was up 41.9% on a year-over-year basis. Synopsys has set its FY 2026 guidance at 14.720-14.800 EPS and its Q3 2026 guidance at 3.630-3.690 EPS. Equities research analysts predict that Synopsys, Inc. will post 10.65 earnings per share for the current year.

Synopsys Profile (Free Report)

Synopsys, Inc is a leading provider of electronic design automation (EDA) software and semiconductor intellectual property (IP) used to design, verify and manufacture integrated circuits and complex systems-on-chip (SoCs). Its product portfolio spans tools and technologies for front‑end design and synthesis, simulation and verification, physical implementation and signoff, and design-for-manufacturability, enabling chip designers to move from architecture through tape‑out.

In addition to core EDA offerings, Synopsys supplies a broad set of semiconductor IP building blocks — such as interface, memory and analog/mixed-signal cores — that customers integrate into SoCs to accelerate development.

Featured Stories Five stocks we like better than Synopsys AMD and Cerbras Create A New Blueprint For Hardware Intel Earnings Reveal Whether the Chip Selloff Created a Buy CrowdStrike’s Cerebras Deal Puts Its AI Security Strategy to the Test Plugging In: How Kinder Morgan Powers Up Profits Want to see what other hedge funds are holding SNPS? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Synopsys, Inc. (NASDAQ:SNPS – Free Report).

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Posted by Defense World Staff on Jul 22nd, 2026

ABN Amro Investment Solutions decreased its position in shares of Synopsys, Inc. (NASDAQ:SNPS – Free Report) by 5.7% during the first quarter, according to its most recent Form 13F filing with the Securities & Exchange Commission. The fund owned 110,956 shares of the semiconductor company’s stock after selling 6,760 shares during the period. ABN Amro Investment Solutions owned approximately 0.06% of Synopsys worth $43,992,000 as of its most recent filing with the Securities & Exchange Commission.

Several other institutional investors have also recently made changes to their positions in SNPS. Sankala Group LLC purchased a new stake in Synopsys in the 4th quarter worth about $25,000. Thurston Springer Miller Herd & Titak Inc. bought a new stake in Synopsys in the fourth quarter worth about $28,000. Caitong International Asset Management Co. Ltd purchased a new position in shares of Synopsys during the fourth quarter valued at approximately $28,000. Atlas Capital Advisors Inc. bought a new position in shares of Synopsys during the fourth quarter valued at approximately $32,000. Finally, Phillip James Consulting Co. bought a new position in shares of Synopsys during the fourth quarter valued at approximately $36,000. Institutional investors own 85.47% of the company’s stock.

Synopsys Price Performance SNPS opened at $389.07 on Wednesday. Synopsys, Inc. has a 12-month low of $366.00 and a 12-month high of $651.73. The business’s fifty day simple moving average is $464.07 and its 200-day simple moving average is $457.23. The company has a market capitalization of $74.50 billion, a price-to-earnings ratio of 90.06, a PEG ratio of 2.22 and a beta of 1.22. The company has a current ratio of 1.43, a quick ratio of 1.32 and a debt-to-equity ratio of 0.33.

Synopsys (NASDAQ:SNPS – Get Free Report) last issued its earnings results on Wednesday, May 27th. The semiconductor company reported $3.35 earnings per share (EPS) for the quarter, topping the consensus estimate of $3.15 by $0.20. The company had revenue of $2.28 billion for the quarter, compared to analysts’ expectations of $2.25 billion. Synopsys had a net margin of 8.91% and a return on equity of 5.83%. The firm’s quarterly revenue was up 41.9% on a year-over-year basis. During the same period in the prior year, the business earned $3.67 EPS. Synopsys has set its FY 2026 guidance at 14.720-14.800 EPS and its Q3 2026 guidance at 3.630-3.690 EPS. On average, equities research analysts anticipate that Synopsys, Inc. will post 10.65 earnings per share for the current fiscal year.

Analyst Ratings Changes A number of equities research analysts recently issued reports on SNPS shares. BNP Paribas Exane raised their price target on Synopsys from $425.00 to $450.00 and gave the stock an “underperform” rating in a research note on Thursday, May 28th. Robert W. Baird set a $558.00 price objective on Synopsys in a research report on Thursday, May 28th. Benchmark started coverage on Synopsys in a research note on Wednesday, July 15th. They issued a “buy” rating and a $570.00 target price on the stock. KeyCorp reiterated an “overweight” rating on shares of Synopsys in a research report on Thursday, May 28th. Finally, Berenberg Bank set a $633.00 target price on shares of Synopsys in a research note on Wednesday, May 27th. Two research analysts have rated the stock with a Strong Buy rating, ten have assigned a Buy rating, five have given a Hold rating and one has assigned a Sell rating to the company. According to MarketBeat.com, Synopsys currently has an average rating of “Moderate Buy” and a consensus price target of $570.06.

Check Out Our Latest Research Report on SNPS

Insider Buying and Selling In related news, CFO Shelagh Glaser sold 3,394 shares of Synopsys stock in a transaction that occurred on Friday, June 12th. The shares were sold at an average price of $450.02, for a total transaction of $1,527,367.88. Following the transaction, the chief financial officer directly owned 14,358 shares of the company’s stock, valued at $6,461,387.16. This trade represents a 19.12% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Sassine Ghazi sold 14,603 shares of Synopsys stock in a transaction that occurred on Monday, June 15th. The shares were sold at an average price of $458.96, for a total transaction of $6,702,192.88. Following the transaction, the chief executive officer directly owned 75,020 shares in the company, valued at approximately $34,431,179.20. The trade was a 16.29% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. 0.56% of the stock is currently owned by company insiders.

Trending Headlines about Synopsys Here are the key news stories impacting Synopsys this week:

Positive Sentiment: Mizuho said Moonshot AI’s Kimi K3 release reinforces, rather than weakens, the case for agentic AI and could benefit EDA software leaders like Synopsys, prompting a “buy the dip” view after the recent selloff. Buy the dip in EDA stocks as Kimi K3 boosts agentic AI thesis: Mizuho Positive Sentiment: Another analysis argued Synopsys should benefit regardless of which companies win the AI race, since AI development across the industry still requires chip-design software and infrastructure. Synopsys Should Benefit No Matter Who Wins The AI Race. Here’s What Explains Its Poor Stock Performance. Neutral Sentiment: Technical-trading coverage said SNPS was testing an important price level and had shown signs of stabilization, suggesting traders may be watching for a reversal rather than reacting to a new business catalyst. Stock Of The Day: Will Synopsys Reverse? Neutral Sentiment: Broader market headlines also mentioned SNPS in the context of a firmer futures market, which may have helped sentiment somewhat, but did not add company-specific news. Stock Market Today: S&P 500, Dow Jones Futures Gain as Trump Says Iran is ‘Very, Very Badly Damaged’— Eva Live, RTX, Synopsys in Focus Synopsys Profile (Free Report)

Synopsys, Inc is a leading provider of electronic design automation (EDA) software and semiconductor intellectual property (IP) used to design, verify and manufacture integrated circuits and complex systems-on-chip (SoCs). Its product portfolio spans tools and technologies for front‑end design and synthesis, simulation and verification, physical implementation and signoff, and design-for-manufacturability, enabling chip designers to move from architecture through tape‑out.

In addition to core EDA offerings, Synopsys supplies a broad set of semiconductor IP building blocks — such as interface, memory and analog/mixed-signal cores — that customers integrate into SoCs to accelerate development.

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Moonshot AI's launch of its latest artificial intelligence model, Kimi K3, has shaken global technology markets, reviving memories of the DeepSeek shock earlier this year.

While the model has intensified concerns over the dominance of US AI leaders such as OpenAI and Anthropic, analysts say the broader implications for the AI ecosystem are more nuanced, with several hardware and infrastructure companies potentially emerging as long-term winners.

The Chinese startup claims Kimi K3 rivals some of the world's most advanced AI models despite relying on fewer cutting-edge AI chips, raising fresh questions about the future economics of AI development and spending.

The announcement triggered renewed selling across semiconductor stocks on Friday as investors weighed the possibility that advances in AI efficiency could reduce future demand for expensive computing hardware.

The Philadelphia Semiconductor Index dropped 4% during the session.

"Whatever gap existed between American and Chinese frontier AI just got a lot smaller, and it happened on the exact morning Wall Street was busy convincing itself AI economics don't add up," Mark Malek, chief investment officer at Siebert Financial, wrote following the market reaction on Friday.

Despite concerns surrounding AI chip demand, several investors believe memory manufacturers remain among the strongest positioned companies as AI models continue becoming larger and more capable.

According to Bloomberg, Kimi K3 features 2.8 trillion parameters and supports a one-million-token context window, specifications that require substantially higher memory capacity than previous generations of AI models.

Stanley Tang, senior portfolio manager at Sumitomo Mitsui DS Asset Management, told Bloomberg that memory suppliers should remain among the biggest beneficiaries because the market continues to be dominated by only a handful of companies, including SK Hynix and Samsung Electronics.

Tang added that growing adoption of models such as Kimi K3 is unlikely to reduce overall computing demand.

Instead, broader deployment of agentic AI systems could accelerate hardware consumption over time.

That view is shared by Gary Tan, portfolio manager at Allspring Global Investments.

He told Bloomberg that "the biggest winners will remain the AI infrastructure layer," adding that China's push toward open-source AI would require greater computing resources and continue driving demand for networking equipment and memory chips.

However, whether Nvidia and AMD can maintain the scarcity premium that has driven their valuations is less certain.

While semiconductor shares broadly came under pressure, Mizuho believes concerns surrounding electronic design automation software companies have been overstated.

The brokerage said Kimi K3 strengthens rather than weakens its long-term investment thesis for Synopsys and Cadence Design Systems.

Both companies fell between 8% and 10% last week as investors worried that increasingly capable open-source AI models from China could eventually replace portions of the semiconductor design process.

Mizuho's TMT sector specialist Jordan Klein said those fears were misplaced.

The firm said it "believes this risk is way overblown" and maintained its positive stance on both companies, Investing.com reported.

According to Klein, Kimi K3 functions as a general-purpose AI agent using existing open-source EDA tools such as OpenRoad rather than replacing the underlying software platforms.

He argued that foundation AI models cannot substitute for the deterministic and physically accurate engineering tools required for semiconductor design.

Instead, autonomous AI agents are expected to increase usage of existing EDA software by helping engineers work more efficiently.

Mizuho believes this trend supports its broader "agentic AI engineer" thesis, under which AI helps address the semiconductor industry's engineering talent shortage while expanding monetization opportunities for EDA companies beyond software licensing into engineering productivity, potentially tripling the industry's addressable market over time.

Synopsys (SNPS - Free Report) closed the most recent trading day at $384.28, moving -7.85% from the previous trading session. This change lagged the S&P 500's daily loss of 1.01%. Meanwhile, the Dow lost 0.77%, and the Nasdaq, a tech-heavy index, lost 1.4%.

Shares of the maker of software used to test and develop chips witnessed a loss of 8.45% over the previous month, trailing the performance of the Computer and Technology sector with its loss of 3.73%, and the S&P 500's gain of 0.32%.

Analysts and investors alike will be keeping a close eye on the performance of Synopsys in its upcoming earnings disclosure. It is anticipated that the company will report an EPS of $3.68, marking a 8.55% rise compared to the same quarter of the previous year. Our most recent consensus estimate is calling for quarterly revenue of $2.44 billion, up 40.31% from the year-ago period.

For the full year, the Zacks Consensus Estimates project earnings of $14.75 per share and a revenue of $9.69 billion, demonstrating changes of +14.25% and +37.37%, respectively, from the preceding year.

It is also important to note the recent changes to analyst estimates for Synopsys. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. Synopsys is holding a Zacks Rank of #1 (Strong Buy) right now.

In the context of valuation, Synopsys is at present trading with a Forward P/E ratio of 28.27. This denotes a premium relative to the industry average Forward P/E of 15.9.

Investors should also note that SNPS has a PEG ratio of 1.77 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Computer - Software industry had an average PEG ratio of 1.31 as trading concluded yesterday.

The Computer - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 92, positioning it in the top 38% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

In the latest trading session, Synopsys (SNPS - Free Report) closed at $417.03, marking a -1.94% move from the previous day. This change lagged the S&P 500's daily loss of 0.51%. On the other hand, the Dow registered a loss of 0.2%, and the technology-centric Nasdaq decreased by 1.47%.

The maker of software used to test and develop chips's stock has dropped by 7.9% in the past month, falling short of the Computer and Technology sector's loss of 2.99% and the S&P 500's gain of 0.53%.

The upcoming earnings release of Synopsys will be of great interest to investors. The company is predicted to post an EPS of $3.68, indicating a 8.55% growth compared to the equivalent quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $2.44 billion, up 40.31% from the year-ago period.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $14.75 per share and revenue of $9.69 billion. These totals would mark changes of +14.25% and +37.37%, respectively, from last year.

Investors should also pay attention to any latest changes in analyst estimates for Synopsys. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Synopsys is currently sporting a Zacks Rank of #1 (Strong Buy).

In terms of valuation, Synopsys is presently being traded at a Forward P/E ratio of 28.83. This expresses a premium compared to the average Forward P/E of 16.49 of its industry.

Meanwhile, SNPS's PEG ratio is currently 1.8. 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. The Computer - Software industry had an average PEG ratio of 1.26 as trading concluded yesterday.

The Computer - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 95, this industry ranks in the top 39% of all industries, numbering over 250.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

The global semiconductor boom has hit a critical bottleneck in 2026 – a severe shortage of skilled chip design engineers.

Tech giants are increasingly struggling to source human talent as they race to build custom artificial intelligence (AI) silicon.

This has created a historic opportunity for Electronic Design Automation (EDA) firms as they are uniquely positioned to solve the crisis using autonomous “Agentic AI”.

For investors, two names stand out for playing this untapped opportunity, which Goldman Sachs estimates will be worth $3.7 billion in annual revenue by the end of this decade.

Cadence stock has emerged as a premier darling for investors seeking resilient, ultra-high-margin software growth.

The company enters the back half of 2026 with an outstanding fundamental momentum, supported by a record $8 billion order backlog.

CDNS specializes in the incredibly complex process of mapping billions of microscopic transistors onto minuscule silicon footprints – a task now made exponentially faster by its integrated AI design platforms.

Boasting exceptional gross margins of over 85%, the Nasdaq-listed firm offers investors a pristine balance sheet and zero distraction from integration complications.

By automating repetitive engineering task via autonomous design agents, Cadence Design Systems mitigates the talent deficit for its customers, securing its place as an essential, high-margin anchor for any tech-focused portfolio.

Goldman Sachs recently raised its price target on CDNS shares to $470, indicating potential upside of more than 25% from current levels.

Note that Cadence is currently testing its 20-day and 50-day moving averages (MAs), with a clear break above the $379 level expected to sustain upward momentum in the near-term.

Synopsys stock represents the other half of the dominant EDA duopoly – bringing impressive scale and advanced system simulation to the table.

To secure its long-term dominance, the company has aggressively broadened its footprint, notably through its landmark integration of engineering software leader Ansys.

This combined portfolio gives SNPS an unmatched advantage when simulating how complex multi-chip systems behave under heavy artificial intelligence workloads.

While Synopsys currently trades at a premium valuation of about 41x forward earnings and faces post-merger integration adjustments as well, its long-term outlook remains lucrative, which is why Goldman Sachs has a $600 price target on SNPS, indicating a 40% upside from here.

The investment firm acknowledges “near-term risks” – including evolving global export curbs and potential volatility in custom hardware development.

However, Synopsys Inc’s unparalleled reach makes it an indispensable partner for the hyperscalers building out the world's next-generation data centers, making it an ideal long-term compounder.

From a technical perspective, SNPS currently sits a little under its 20-day moving average (MA), with a decisive break above the $446 level expected to accelerate bullish momentum in the near-term.

© gorodenkoff / iStock via Getty Images

Synopsys (NASDAQ:SNPS | SNPS Price Prediction) has become one of the most important picks-and-shovels plays on the AI buildout, yet the stock has quietly slipped 16.43% over the past year.

Our 24/7 Wall St. price target for Synopsys is $516.71, implying 18.2% upside from the current $437.16 level. Our recommendation is buy, at a 90% confidence level, one of the higher conviction readings in our large-cap software coverage.

24/7 Wall St. Price Target Summary Metric Value Current Price $437.16 24/7 Wall St. Price Target $516.71 Upside 18.2% Recommendation BUY Confidence Level 90% A Post-Ansys Reset That Masks the Underlying Business Synopsys is down 14% over the past month and 6.93% year to date, sitting 14% below its 52-week high of $651.73.

Q2 FY2026, reported May 27, 2026, delivered revenue of $2.28 billion, up 41.98% year over year, and non-GAAP EPS of $3.35 against a $3.16 estimate. Management raised FY2026 revenue guidance to a midpoint of $9,665 million and non-GAAP EPS to $14.76.

The overhang is optical. GAAP net income fell 95.05% year over year, weighed down by $403.6 million in quarterly amortization of acquired intangibles from the $35 billion Ansys deal that closed in July 2025. Piper Sandler upgraded to Overweight on June 28, lifting its target to $550, and Elliott Investment Management pushed a board seat for Jesse Cohn to accelerate synergy realization.

The Case for $650 and Higher The bull scenario runs to $652.84, a 49.34% return. It rests on three pillars. First, AI is a genuine tailwind for EDA. CEO Sassine Ghazi described it plainly: “AI is scaling semiconductor demand, architectural diversity and complexity of chips and the systems they power.”

Second, Design Automation adjusted operating margin expanded to 43.3% from 40.9%, and Ansys synergies are still ramping.

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Third, the backlog stands at $11.4 billion. The Street consensus target of $563.74 sits comfortably between our base and bull cases.

The Risks Worth Watching Our bear case targets $463.27. Long-term debt sits near $10 billion post-Ansys, though Synopsys has already repaid $3.46 billion in the first half of FY2026. Design IP softened to $454.2 million, and a securities class action alleges the segment’s economics were misrepresented.

Bulls would counter that the planned Processor IP Solutions divestiture is a deliberate reallocation to higher-growth areas, and that 91% institutional ownership plus a Piper Sandler upgrade suggest smart money views the Design IP concern as contained.

Synopsys Price Prediction 2026-2030 My verdict is a buy with a 24/7 Wall St. price target of $516.71 at 90% confidence. The factor that tips the scale is margin expansion in Design Automation against a backdrop of accelerating AI chip design workloads.

The bullish case strengthens if Ansys synergies land on schedule and export controls remain manageable. The setup weakens if the securities litigation escalates or if Design IP weakness spreads into the core EDA franchise.

Year 24/7 Wall St. Price Target 2026 $469.92 2027 $516.71 2028 $591.79 2029 $663.17 2030 $736.97 These projections assume Synopsys continues to execute on its silicon-to-systems roadmap and Ansys synergies compound. Significant upside or downside could come from a step-change in AI chip design intensity or a material regulatory action tied to export controls.

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Contact [email protected] for any questions or corrections.

Synopsys (SNPS - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.

Shares of this maker of software used to test and develop chips have returned -8.7% over the past month versus the Zacks S&P 500 composite's -1.4% change. The Zacks Computer - Software industry, to which Synopsys belongs, has lost 20.3% over this period. Now the key question is: Where could the stock be headed in the near term?

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.

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.

Synopsys is expected to post earnings of $3.68 per share for the current quarter, representing a year-over-year change of +8.6%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

For the current fiscal year, the consensus earnings estimate of $14.75 points to a change of +14.3% from the prior year. Over the last 30 days, this estimate has remained unchanged.

For the next fiscal year, the consensus earnings estimate of $17.18 indicates a change of +16.4% from what Synopsys is expected to report a year ago. Over the past month, the estimate has changed +0.2%.

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 GrowthWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.

For Synopsys, the consensus sales estimate for the current quarter of $2.44 billion indicates a year-over-year change of +40.3%. For the current and next fiscal years, $9.69 billion and $10.68 billion estimates indicate +37.4% and +10.2% changes, respectively.

Last Reported Results and Surprise HistorySynopsys reported revenues of $2.28 billion in the last reported quarter, representing a year-over-year change of +41.9%. EPS of $3.35 for the same period compares with $3.67 a year ago.

Compared to the Zacks Consensus Estimate of $2.25 billion, the reported revenues represent a surprise of +1.13%. The EPS surprise was +5.68%.

Over the last four quarters, Synopsys surpassed consensus EPS estimates three times. The company topped consensus revenue estimates three times 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.

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 #1 does suggest that it may outperform the broader market in the near term.

It has been about a month since the last earnings report for Synopsys (SNPS - Free Report) . Shares have lost about 5.3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Synopsys due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important catalysts.

Synopsys Q2 Earnings Surpass Estimates, Revenues Rise Y/YSynopsys reported non-GAAP earnings of $3.35 per share for the second quarter of fiscal 2026, which beat the Zacks Consensus Estimate by 5.7%. The bottom line decreased 8.7% on a year-over-year basis.

Synopsys’ fiscal second-quarter revenues jumped 41.9% year over year to $2.28 billion, beating the Zacks Consensus Estimate by 1.1%. The top line was primarily driven by an increase in revenues of Time-Based Product, Upfront Product and Maintenance and Service businesses.

Synopsys’ Q2 DetailsIn the license-type revenue group, Time-Based Product revenues of $945.6 million (representing 41.5% of total revenues) increased 14.2% year over year. Upfront Product revenues (24% of total) rose 7% to $546.3 million. Maintenance and Service revenues (34.5% of total) surged to $784.1 million, up sharply from the year-ago quarter’s $265.3 million.

Segment-wise, Design Automation revenues, which include EDA, Ansys and Other, were $1.82 billion, representing 80% of total revenues and up 62.3% from the prior-year quarter. Design IP revenues were $454.2 million, representing 20% of total revenues and down from $482 million a year ago. With the addition of Ansys, the Simulation & Analysis group is now incorporated into the EDA segment, beginning the third quarter of fiscal 2025. Other revenues were $7 million, representing 0.3% of total revenues. Ansys contributed 28.7% of the total revenues.

Geographically, Synopsys generated $998.5 million from North America (44% of total) and $378.1 million from Europe (17%). Revenues from Korea (12%), China (10%) and Other regions (17%) were $265.4 million, $240.4 million and $393.6 million, respectively.

The non-GAAP operating margin for the quarter was 39.5%, which expanded 150 basis points from the year-ago period.

Within segments, Design Automation’s adjusted operating margin improved to 43.3%, up from 40.9% a year earlier, while the Design IP segment’s adjusted margin contracted to 24.4%, down from 31.2% last year.

Synopsys’ Balance Sheet & Cash FlowSynopsys ended the second quarter of fiscal 2026 with $2.48 billion in cash, cash equivalents and short-term investments, up from $2.20 billion in the prior quarter. Total long-term debt was $10.01 billion.

During the second quarter of fiscal 2026, Synopsys generated $629 million in operating cash flow.

SNPS Raises Guidance for FY26For fiscal 2026, Synopsys raised its revenue outlook to $9.625-$9.705, up from the prior guided range of $9.56-$9.66 billion. SNPS lifted the non-GAAP EPS target to $14.72-$14.80 per share, up from the prior guidance of $14.38-$14.46.

For the third quarter of fiscal 2026, the company expects revenues of $2.41-$2.4 billion and non-GAAP earnings of $3.63-$3.69 per share.

How Have Estimates Been Moving Since Then?It turns out, estimates review have trended upward during the past month.

VGM ScoresCurrently, Synopsys has a average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Synopsys has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Market Leaders Including Cisco, MediaTek, NVIDIA, and Samsung Foundry
Demonstrate Measurable Impact, Advancing the Shift from Overdesign to Co-design

Key Highlights

Integrates golden signoff multiphysics analysis directly into timing signoff, design closure, multi-die, and analog workflows, enabling earlier, more accurate design decisions Enables SPICE-accurate multiphysics timing analysis with up to 3x faster runtimes Delivers up to 10x faster design closure with higher ECO success rates and improved PPA Provides concurrent power integrity, electromagnetic, and thermal analysis across dies and packaging, enabling early system-level insights from exploration to signoff , /PRNewswire/ -- Synopsys, Inc. (NASDAQ: SNPS) today announced availability of its first Multiphysics Fusion™ solutions for customer deployment. As chip complexity increases, physics-related challenges including signal integrity, power integrity, thermal integrity, electromagnetic effects, and co-packaged optics are becoming critical constraints at advanced nodes and in multi-die architectures, requiring a unified EDA and multiphysics approach. The Multiphysics Fusion portfolio combines Synopsys' AI-powered EDA solutions with Ansys golden signoff analysis across timing signoff, design closure, multi-die design, and analog workflows. Validated by market leaders, these solutions improve predictability and accelerate convergence for AI and high-performance computing systems.

"Multiphysics is fundamentally reshaping how advanced semiconductor designs are engineered, driving a shift from costly overdesign to integrated, system-aware co-design," said Sanjay Bali, Senior Vice President of EDA Product Management and Strategy at Synopsys. "Our Multiphysics Fusion portfolio unifies Synopsys and Ansys technologies to embed physics directly into digital and analog workflows, enabling engineering teams to design across domains with fewer iterations, improved productivity and more optimized silicon for next-generation systems."

Enabling Multiphysics‑Aware Co-Design Across the Chip Design Flow
Building on the vision introduced at Synopsys Converge 2026, the first Multiphysics Fusion solutions include targeted GPU-accelerated flows powered by NVIDIA CUDA-X libraries such as cuDSS:

Multiphysics Fusion for Timing Signoff: Enables up to 3x faster runtimes, SPICE-accurate multiphysics timing analysis. Integrates Synopsys PrimeTime® with RedHawk-SC™ and RedHawk-SC Electrothermal™, along with unified full-spectrum RC extraction using Synopsys StarRC™ and multiphysics HFSS-IC, to incorporate IR, thermal, and stress effects, improving margins and reducing IR-induced timing escapes. Multiphysics Fusion for Design Closure: Delivers up to 10x faster design closure with higher engineering change order (ECO) success rates and improved power, performance and area (PPA). Combines Synopsys PrimeClosure™ with RedHawk-SC to embed power integrity into golden signoff optimization, accelerating convergence with fewer iterations. Multiphysics Fusion for Multi-die Designs: Unified Synopsys 3DIC Compiler platform with RedHawk-SC, RedHawk-SC Electrothermal and multiphysics HFSS-IC for concurrent power integrity, thermal, and electromagnetic analysis, providing early system insights from exploration to golden signoff with correct-by-construction design. Multiphysics Fusion for Analog & Photonic Design: Integrates Synopsys Custom Compiler™ with multiphysics HFSS-IC for on-chip, high accuracy electromagnetic analysis into the analog design flow, and Synopsys OptoCompiler with Lumerical enabling end-to-end photonic IC and co-packaged optics systems. Demonstrating Real-World Impact with Market Leaders
Early engagements with leading semiconductor and systems companies validate the value of Multiphysics Fusion solutions:

"As multi-die integration becomes increasingly important for high performance compute platforms, it's critical we make the right system-level design decisions early in the development process," said Harrison Hsieh, vice president at MediaTek. "By unifying multiphysics analysis and timing signoff across digital, analog, photonic and multi-die designs, Synopsys Multiphysics Fusion technology gives us earlier insight into cross-domain interactions across silicon, advanced packaging and optical domains, which makes it possible for us to improve predictability, reduce late-stage rework, and achieve a runtime that's 10 times faster than before."

"Advanced AI and high-performance computing platforms are pushing chip design beyond traditional workflows, and to deliver greater performance, efficiency and reliability at scale, multiphysics-aware co-design is essential," said Tim Costa, vice president and general manager of computational engineering at NVIDIA. "Synopsys is using NVIDIA accelerated computing and CUDA-X libraries, including cuDSS, which delivers up to 13x GPU acceleration, to scale increasingly complex SPICE simulations, electromagnetics, and power-integrity workloads. In addition, Synopsys Multiphysics Fusion solutions enable up to 5x faster design closure and up to 86% IR fix rates in selected pilot designs."

"Accurate timing signoff at advanced nodes requires a unified approach that accounts for IR drop, thermal, and stress effects directly within timing analysis," said Hyung-Ock Kim, vice president and head of the Foundry Design Technology Team at Samsung Electronics. "Synopsys' Multiphysics Fusion technology provides a unified, all‑aware timing signoff platform by integrating PrimeTime with multiphysics insight, delivering SPICE-accurate correlation and enabling margin recovery. This is increasingly important as we pursue higher levels of integration, performance, and reliability across advanced process and multi‑die technologies."

In addition, the Cisco Silicon One group is leveraging Synopsys Multiphysics Fusion technology to unify IR drop effects within signoff design closure to gain earlier, more accurate visibility into real-world conditions. Combined with signoff-accurate, timing-aware IR fixing, this enables predictive optimization—helping Cisco Silicon One converge on power integrity issues faster, deliver better PPA, and achieve significantly faster runtime.

Availability
Multiphysics Fusion solutions for timing signoff, design closure, multi-die design, and analog and photonic design are available today. For more information, visit, https://www.synopsys.com/solutions/multiphysics-fusion.html.  

Resources

Blog: From Overdesign to Co-Design: Confronting Multiphysics Challenges in Chips Blog: New Synopsys Multiphysics Fusion™ Technology Set to Transform Chip and Product Engineering eBook: Multiphysics Fusion Technology for Multi-Die Designs Explained eBook: Optimizing Analog Design with Multiphysics News Release: Synopsys Outlines Vision for Engineering the Future 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.

© 2026 Synopsys, Inc. All rights reserved. Synopsys, Ansys, the Synopsys and Ansys logos, and other Synopsys trademarks are available at https://www.synopsys.com/company/legal/trademarks-brands.html. Other company or product names may be trademarks of their respective owners.

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.

SOURCE Synopsys, Inc.

Synopsys (SNPS - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.

Over the past month, shares of this maker of software used to test and develop chips have returned -7.5%, compared to the Zacks S&P 500 composite's +0.3% change. During this period, the Zacks Computer - Software industry, which Synopsys falls in, has lost 9.4%. 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 RevisionsRather 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.

Synopsys is expected to post earnings of $3.68 per share for the current quarter, representing a year-over-year change of +8.6%. Over the last 30 days, the Zacks Consensus Estimate has changed +2.2%.

The consensus earnings estimate of $14.75 for the current fiscal year indicates a year-over-year change of +14.3%. This estimate has changed +3.4% over the last 30 days.

For the next fiscal year, the consensus earnings estimate of $17.14 indicates a change of +16.2% from what Synopsys is expected to report a year ago. Over the past month, the estimate has changed +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

Revenue Growth ForecastEven 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 $2.44 billion for the current quarter points to a year-over-year change of +40.3%. The $9.69 billion and $10.67 billion estimates for the current and next fiscal years indicate changes of +37.4% and +10.1%, respectively.

Last Reported Results and Surprise HistorySynopsys reported revenues of $2.28 billion in the last reported quarter, representing a year-over-year change of +41.9%. EPS of $3.35 for the same period compares with $3.67 a year ago.

Compared to the Zacks Consensus Estimate of $2.25 billion, the reported revenues represent a surprise of +1.13%. The EPS surprise was +5.68%.

Over the last four quarters, Synopsys surpassed consensus EPS estimates three times. The company topped consensus revenue estimates three times over this period.

ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.

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.

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.

Synopsys (NASDAQ:SNPS | SNPS Price Prediction) is one of the most strategically positioned software franchises in the AI-era semiconductor stack, and the recent pullback has reset the setup for investors evaluating the name.

The 24/7 Wall St. price target for Synopsys is $561.40, implying 23.25% upside from $455.51. Our model classifies SNPS as a high-conviction setup, with 90% confidence in the target.

24/7 Wall St. Price Target Summary Metric Value Current Price $455.51 24/7 Wall St. Price Target $561.40 Upside 23.25% Recommendation BUY Confidence 90% A Strong Quarter Met With a Sleepy Stock SNPS is down 7.77% over the past month and 3.03% year to date, trading 14% below its 52-week high of $651.73 and well off the low of $376.18.

The cooldown followed a strong Q2 FY26 print on May 27, 2026: revenue of $2.276B, up 42% YoY, with non-GAAP EPS of $3.35 beating estimates by 5.96%. Design Automation operating margin expanded to 43.3% from 40.9% a year earlier. Management raised FY26 guidance to $9.625B to $9.705B in revenue and $14.72 to $14.80 in non-GAAP EPS.

  The Case for $667 and Beyond Bulls have a clean thesis. CEO Sassine Ghazi said on the Q2 call that “AI is scaling semiconductor demand, architectural diversity and complexity of chips and the systems they power, driving demand across our portfolio.”

Synopsys sits at the choke point for every advanced-node design, and the $35 billion Ansys acquisition that closed July 17, 2025 extends that moat into multi-physics simulation.

Q1 FY26 revenue grew 65.4% YoY, and the backlog stood at $11.4B exiting FY25. Of 25 analysts, 17 rate the stock Buy or Strong Buy against just one Strong Sell. Our bull case scenario puts SNPS at $667.14 within 12 months, a 46.46% return, if Ansys synergies accelerate and the September 30 Investor Day reveals raised long-term targets.

The Risks Worth Watching The bear case starts with the balance sheet. SNPS carries roughly $10B in long-term debt and $403.6M in quarterly intangibles amortization, which crushed GAAP net income to $17.1M in Q2.

Bulls will counter that this is purely a non-cash artifact of purchase accounting and that non-GAAP EPS and free cash flow of $2B tell the real story. Design IP remains soft, with management divesting Processor IP Solutions, and export controls into China remain an overhang.

Year-over-year quarterly earnings growth of -0.96% trimmed our factor by 0.03. The bear scenario lands the stock at $494.55 over the next year, still 8.57% above today.

Synopsys Price Prediction 2026-2030 The 24/7 Wall St. price target of $561.40 reflects a high-confidence buy. The tipping factor is the disconnect between accelerating non-GAAP fundamentals and a stock that has gone nowhere YTD.

The bull case rests on AI-driven design complexity remaining a multi-year tailwind and Ansys synergies landing as guided. The bear case strengthens if the trailing P/E of 104 matters more than the forward P/E of 31, or if China export controls tighten further.

Looking further out, here is where our model projects SNPS could trade, assuming current growth and margin trajectories hold.

Year 24/7 Wall St. Price Target 2026 $561.40 2027 $666.63 2028 $710.01 2029 $805.26 2030 $849.44 These projections assume Synopsys keeps executing on Ansys integration and AI design demand stays robust. Significant upside or downside could come from China export policy, EDA pricing power, or the pace of advanced-node design starts.

Key Takeaways SNPS benefits from AI chip design demand, with DSO.ai used in more than 700 tape-outs.Synopsys expects fiscal 2026 revenue growth of 14.3%, with 83% of revenue recurring.APLD has 1.2 GW under contract, but nearly 90% of contracted revenues come from two customers. Synopsys (SNPS - Free Report) and Applied Digital (APLD - Free Report) are two of the biggest beneficiaries of surging AI capital expenditure by global investors in the semiconductor industry. All the layers of the semiconductor industry, including electronic and design automation, integrated device manufacturing, chip fabrication, fabless chip designers, packaging and assembly equipment players are gaining from the AI trend. These companies are not only growing on the back of their products but are also cashing in on the sale of intellectual property and patents of their technology.

Although Synopsys and Applied Digital serve separate verticals of the semiconductor industry, the AI tailwind is helping both companies grow. APLD serves as an infrastructure provider to new-age AI and high performance computing companies and builds, owns and operates large-scale data centers for them. Synopsys, on the other hand, automates engineering workflows, improves customer productivity and gains from the system-level and semiconductor R&D spending and robust AI compute design activity.

Given these dynamics, let's discuss the fundamentals of these two giants and pick the one that has more upside in the AI landscape.

The Case for Synopsys StockSynopsys is gaining from a multi-trillion-dollar AI infrastructure buildout as it leverages its 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.

SNPS is using AI in two ways, which include making chip design faster and better and preparing for a broader shift where AI becomes a more autonomous workflow layer across design, verification and simulation. Synopsys provides DSO.ai and VSO.ai. DSO.ai is an optimization engine focused on tape-outs, while VSO.ai is being used more deeply in SoC blocks and verification workflows.

Synopsys’ customers have used DSO.ai to optimize more than 700 cumulative tape-outs, and VSO.ai has been deployed in up to 90% of SoC blocks on some chips, per its most recent earnings call. Synopsys has implemented AI in its product layer, which it calls XSO.ai, that enables its customers to train AI on their own workflow to create knowledge-assistant tools.

Another major contributor to Synopsys’ top line is its Design IP business. Over the years, Synopsys has heavily invested in developing and acquiring intellectual property for semiconductor electronic design automation and these IPs are now licensed by other companies, making SNPS a strong link in the AI semiconductor chain. Synopsys has expanded beyond its traditional silicon design business with the acquisition of Ansys, adding multi-physics simulation capabilities to its portfolio.

Synopsys generates most of its revenue from recurring sources, which made up 83% of total revenues in the second quarter of fiscal 2026. The Zacks Consensus Estimate for the SNPS’ fiscal 2026 revenues is pegged at $9.69 billion, suggesting year-over-year growth of 14.3%. The estimate for fiscal 2026 earnings implies year-over-year growth of 37.4%, which has remained unchanged over the past 30 days.

Image Source: Zacks Investment Research

The Case for Applied Digital StockApplied Digital is building its next growth phase around power infrastructure, which is becoming an increasingly important factor in AI data center deployment. As hyperscalers continue expanding AI workloads, access to reliable and scalable power is expected to play a larger role in data center site selection. APLD's strategy of securing utility-connected power capacity and developing campuses in energy-abundant regions could strengthen its position in the rapidly growing AI infrastructure market.

The company's North Dakota campuses are expected to provide a competitive advantage through access to low-cost grid power, favorable cooling conditions and an established operating footprint. These factors may help APLD offer customers long-term efficiency benefits while supporting the economics of multi-year hyperscale leases. The company already has 1.2 gigawatts of critical IT capacity under contract and is actively marketing additional development sites with more than 3.5 gigawatts of utility-connected power capacity. As AI infrastructure demand rises, these assets could support future leasing activity and expand APLD's revenue base.

However, customer concentration remains elevated despite continued efforts to diversify its hyperscale customer base. APLD has expanded its development pipeline and is actively pursuing additional leasing opportunities, but contracted revenues remain heavily concentrated among a limited number of customers, creating an ongoing risk to long-term revenue visibility.

The concentration remains significant. Of the company's approximately $36 billion in total contracted lease revenues, $11 billion is attributable to CoreWeave, while a separate hyperscaler anchors Delta Forge 1, Polaris Forge 3 and Delta Forge 2 and accounts for $20 billion. The remaining $5 billion is tied to a third hyperscaler at Polaris Forge 2. Together, just two customers represent close to 90% of total contracted revenues.

Applied Digital also works on a capex-heavy business model, which is keeping its bottom-line growth modest. The Zacks Consensus Estimate for APLD's fiscal 2026 revenues is pegged at $395 million, suggesting year-over-year growth of 83.5%. The estimate for fiscal 2026 earnings implies modest year-over-year growth of 15.2%, which has been revised downward in the past 30 days.

Image Source: Zacks Investment Research

SNPS vs. APLD: Price Performance & Valuation CheckSynopsys shares have lost 1.3% in the past year, while shares of Applied Digital have soared 358%.

Past One-Year Performance Chart
Image Source: Zacks Investment Research

On the valuation front, Applied Digital trades at a forward 12-month price-to-sales (P/S) multiple of 16.48 above its one-year median of 16.28x, while Synopsys’ 8.62x trades below its one-year median of 9.11x.

Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research

Conclusion: SNPS vs APLDWhile both Synopsys and Applied Digital are positioned to benefit from the ongoing AI infrastructure boom, Synopsys appears to be the stronger investment choice based on the quality, durability and profitability of its growth. Applied Digital remains highly capital-intensive, relies on a small number of hyperscale customers and carries greater execution risk as it continues building out data center infrastructure. Given these factors, we suggest SNPS to be a safer choice over APLD stock. SNPS carries a Zacks Rank #2 (Buy), while APLD has a Zacks Rank #5 (Sell) at present.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

On June 16, 2026, we delve into the DCF analysis for Synopsys Inc SNPS , a company that has seen a price performance decline of 4.0% over the past week and 9.6% over the past month. The current market price stands at $454.38, with a market cap of $87,004 million.

DCF Earnings-based intrinsic value of $394.50 vs current price ($454.38) indicates a margin of safety of -15.2%. DCF FCF-based intrinsic value of $344.67 suggests a second opinion of modestly overvalued status. GF Score™ of 95/100 indicates high reliability of the DCF inputs. What Is SNPS Worth? DCF Earnings-Based Model The DCF earnings-based model for Synopsys Inc utilizes a two-stage valuation approach. In the first stage, we project the company's earnings growth over the next ten years, followed by a terminal growth phase. The assumptions used in this model are crucial for determining the intrinsic value of the stock.

Parameter Value Current EPS (TTM, excl. non-recurring) $13.41 10-Year Growth Rate 19.1% 10-Year Treasury Rate 4.44% Discount Rate (ceil(Treasury) + 6%) 11% Terminal Growth Rate 4% In the growth phase (Years 1-10), the EPS is expected to grow at an annual rate of 19.1%, which is then discounted at a rate of 11%. The terminal phase (Years 11-20) assumes a slowdown in growth to a terminal rate of 4%, also discounted at 11%. Below is a summary of the calculations:

Stage Description Value Growth Stage (Years 1-10) EPS growing at 19.1%, discounted at 11% $201.61 Terminal Stage (Years 11-20) 4% terminal growth, discounted at 11% $192.88 Intrinsic Value Growth + Terminal $394.49 With the current price at $454.38 compared to the intrinsic value of $394.50, we find that Synopsys Inc is fairly valued, with a margin of safety of -15.2%. It is important to note that GuruFocus uses EPS without non-recurring items, as research indicates that stock prices correlate more closely with earnings than with free cash flow. For further calculations, you can visit the SNPS DCF Calculator.

What Does the Free Cash Flow DCF Say? The free cash flow (FCF) based intrinsic value for Synopsys Inc is calculated at $344.67. When comparing this to the earnings-based intrinsic value of $394.50, we see a divergence in the valuation perspectives. The FCF model suggests that the stock is modestly overvalued, with a margin of safety of -31.8%.

How Does GF Value™ Compare to the DCF Models? The GF Value™ for Synopsys Inc stands at $653.38, providing a third perspective on the valuation. GF Value™ is GuruFocus' proprietary measure, calculated from historical trading multiples, past business growth, and future performance estimates. When we analyze the three models, we observe that the DCF earnings-based model indicates fair valuation, the FCF model suggests modest overvaluation, while GF Value™ indicates that the stock is undervalued. For more details, visit the GF Value™ page.

What Does SNPS's GF Score™ Tell Us? The GF Score™ ranks stocks from 0 to 100 based on five key aspects: Financial Strength, Profitability, Growth, Valuation, and Momentum. Stocks with higher GF Score™ values have been found to generate higher long-term returns based on backtested data from 2006 to 2021.

Metric Rating GF Score™ 95/100 Financial Strength 6/10 Profitability 9/10 Growth 10/10 Valuation 8/10 Momentum 8/10 With a predictability rank of 2/5 stars, it indicates that the DCF model may be less reliable for this stock. For more insights, visit the SNPS stock page.

Key Assumptions and Limitations It is essential to recognize that DCF models are highly sensitive to the assumptions made regarding growth rates and discount rates. Stocks with low predictability ratings, such as Synopsys Inc, tend to produce less reliable DCF estimates. Additionally, the terminal growth rate of 4% is a simplifying assumption that may not reflect future market conditions accurately.

What This Means for Investors In summary, the three valuation models present a mixed picture for Synopsys Inc. The DCF earnings model suggests fair valuation, while the DCF FCF model indicates modest overvaluation, and the GF Value™ suggests the stock is undervalued. Overall, the consensus points towards a fair valuation status. For the full DCF analysis, visit the SNPS DCF Calculator. You can also explore the GF Value™ page, or use the GuruFocus Stock Screener to find undervalued predictable companies.

Frequently Asked Questions What is SNPS's intrinsic value based on DCF?

According to our analysis, the earnings-based intrinsic value is $394.50, while the FCF-based intrinsic value is $344.67.

Is SNPS overvalued or undervalued?

The DCF earnings model suggests it is fairly valued, while the FCF model indicates it is modestly overvalued. The GF Value™ suggests it is undervalued, creating a mixed consensus.

How reliable is the DCF model for SNPS?

Given its predictability rank of 2/5, the DCF model may be less reliable for Synopsys Inc compared to stocks with higher predictability ratings.

This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].

Synopsys Inc (NASDAQ:SNPS, XETRA:SYP) reported fiscal second quarter results above Wall Street expectations, with adjusted earnings and revenue both exceeding forecasts and the company lifting its full-year guidance.

Adjusted earnings per share came in at $3.35, topping consensus estimates of $3.15, while revenue rose 41.9% year-over-year to $2.28 billion, above the expected $2.25 billion.

For the full fiscal 2026 year, Synopsys raised its revenue outlook to a range of $9.63 billion to $9.71 billion and increased its non-GAAP earnings per share guidance to $14.72 to $14.80.

Management attributed the broader performance to strength across the business and ongoing integration benefits from Ansys.

"Synopsys delivered a strong second quarter with solid execution and strength across the business," Synopsys CEO Sassine Ghazi said in a statement.

"Our momentum, leadership roadmap, and deep customer engagements are a strong foundation for sustained growth and margin expansion as we solve our customers' toughest engineering challenges."

Despite the beat-and-raise results, investors focused on weakness in the company’s high-margin Design IP segment, which fell 6% year-over-year to $454 million, sending shares of Synopsys down more than 7% to about $486.

Highlights:

New production-ready, AI-powered digital and analog flows are available for second-and third-generation 2nm processes accompanied by an expanded portfolio of certified interface IP, including for Samsung Foundry's automotive nodes. Unique Design Technology Co-Optimization (DTCO) initiatives for synthesis and layout, as well as signoff, are delivering meaningful power, performance, and area (PPA) enhancements. Customers are observing significant test efficiency improvements of up to 20% by leveraging AI-powered, silicon-based design and manufacturing test capabilities validated and deployed in collaboration with Samsung Foundry. , /PRNewswire/ -- Synopsys, Inc. (Nasdaq: SNPS) today announced at Samsung Advanced Foundry Ecosystem (SAFE) Forum 2026 its latest collaborations with Samsung Foundry on advanced nodes, including an expanded portfolio of production‑ready, AI-powered EDA tools, certified interface IP, and silicon-based test capabilities, enabling customers to bring differentiated AI and multi-die designs to market faster and with measurably improved quality.

During his keynote at the event, Synopsys President and CEO Sassine Ghazi underscored the companies' long-standing collaboration to address compounding semiconductor engineering complexity, intense pressure for faster development cycles, and increasing costs. Ghazi emphasized that overcoming these challenges requires a fundamentally new approach where AI driven automation and multiphysics intelligence are fused across the entire design and manufacturing flow. Pointing to initiatives leveraging Synopsys AI-powered solutions and deep design and technology co optimization (DTCO), Ghazi said customers are bringing advanced silicon to market faster, while achieving meaningful gains in PPA and test efficiency, on Samsung Foundry's latest process nodes. 

"Close alignment across design, test, and manufacturing are critical to the success of AI and multi-die designs on advanced nodes," said Hyung‑Ock Kim, vice president and head of the Foundry Design Technology Team at Samsung Electronics. "Our continued close collaboration with Synopsys delivers silicon-based, customer-validated solutions that help our customers reduce design integration risk, improve silicon predictability, and move confidently from design to production for their most innovative solutions."

"As designs become more heterogeneous, customers need production‑ready, silicon-proven solutions that address complexity and minimize risk from silicon to systems," said Ravi Subramanian, Chief Product Management Officer at Synopsys. "Our work with Samsung Foundry translates years of DTCO and silicon learning into enablement that helps our customers get their advanced designs to market quickly and with confidence."

The latest Synopsys and Samsung Foundry collaborations include:

New Synopsys Production-Ready Flows and Improved PPA on third-generation 2nm class process: Synopsys AI-powered digital and analog flows are production-ready for third-generation 2nm class process, helping customers migrate to advanced Samsung Foundry nodes with speed and confidence. Through Synopsys and Samsung Foundry's continued DTCO initiatives, Synopsys Fusion Compiler™ on third-generation 2nm class process delivers measurable power and performance improvements validated with customers, compared to second-generation 2nm class process.  Silicon-Based Power and Performance Improvements During Signoff with Certified Multiphysics Capabilities: New Synopsys PrimeShield™ Process Sensitivity Analysis and PVT Explorer support design-specific optimization and engineering change order (ECO) decisions during signoff, with demonstrated frequency improvement of up to 2.7% within 5% leakage current degradation respectively, informed by silicon feedback on 2nm class-based processes.1 In addition, Synopsys Totem-SC is a newly certified electromigration (EM) and IR drop analysis solution on second-generation 2nm and 4nm class processes improving silicon design power integrity and reliability. AI-Powered Test Improves Efficiency and Quality of Designs: Synopsys and Samsung Foundry are applying silicon-proven methodologies to design for test (DFT) enablement and manufacturing test to reduce test cost and improve test quality for designs on advanced process nodes. For example, Synopsys TestMAX™ with AI-assisted automatic test pattern generation (ATPG) technologies (TSO.ai) validated and deployed in collaboration with Samsung Foundry teams, help reduce test patterns and test cycles up to 20% while preserving fault coverage on SoC and multi-die designs manufactured at Samsung Foundry. Additionally, physically aware tests and failure diagnosis at the die and multi-die level improve test quality and failure analysis turnaround time with results validated on silicon at Samsung Foundry. Unified Exploration‑to‑Signoff Platform with Multiphysics Analysis Supporting Samsung's 3DIC Solution with Hybrid Copper Bonding Technology: Synopsys and Samsung Foundry are enabling scalable 3D multi-die designs through certified multiphysics signoff solutions delivered within Synopsys 3DIC Compiler, a unified exploration-to-signoff platform being validated on a Hybrid Copper Bonding (HCB) 3D test chip. The platform brings together planning, implementation, and multiphysics analysis to enable co-optimization across integrated compute, memory, and advanced packaging systems for Samsung's 3DIC solutions with HCB technology. By replacing manual, margin-based approaches with automated, AI-driven system optimization, the platform accelerates designer productivity while enhancing quality of results (QoR) for next-generation 3D AI designs. Expanded IP Portfolio on Advanced and Automotive Nodes Decreases Design Integration Risk: Synopsys offers the industry's broadest portfolio of IP across Samsung Foundry's advanced processes from 14nm, 8nm, and 5nm class processes to the latest titles for 4nm and second-generation 2nm supporting a wide range of applications for segments including high-performance computing, consumer electronics, mobile devices, and edge AI, as well as automotive applications at 5nm and 2nm class processes. Synopsys' broad portfolio of interface IP—including UCIe, PCIe 7.0, 112G/224G, MIPI, LPDDR6, DDR5 MRDIMM Gen2 and USB4, — and foundation IP—including embedded memories, logic libraries, GPIOs, as well as security IP and Silicon Lifecycle Management (SLM)— are optimized through the companies' long-standing collaboration to deliver trusted, low-risk solutions tailored to Samsung's processes to support faster time to market. SAFE Forum 2026 showcases the continued, deep collaboration between Synopsys and Samsung Foundry, driven by companies' shared commitment to co‑innovation and customer success at the most advanced nodes.

Follow Synopsys online for updates via our Newsroom, on LinkedIn, and on X.

Resources:

Overview: Synopsys and Samsung Collaboration Video: Synopsys and Samsung: Delivering Technology Breakthroughs Together Blog: Accelerating Multi-Die Innovation with Samsung Foundry 1 Compared to a previous version of Synopsys PrimeShield.

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. 

© 2026 Synopsys, Inc. All rights reserved. Synopsys, Ansys, the Synopsys and Ansys logos, and other Synopsys trademarks are available at https://www.synopsys.com/company/legal/trademarks-brands.html. Other company or product names may be trademarks of their respective owners. 

Contacts
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SOURCE Synopsys, Inc.

Synopsys, Inc. has exited a consolidation phase, with catalysts now favoring a bullish outlook and a rating upgrade from Hold to Buy. SNPS consistently outperforms sector and S&P 500 top-line growth, justifying its premium valuation and potential for further market rerating. While not the cheapest AI play, SNPS's strong revenue growth and sustained market share support its elevated earnings multiple.

Synopsys (NASDAQ:SNPS | SNPS Price Prediction) runs the software that designs the world’s most advanced chips. With AI workloads exploding and the $35 billion Ansys acquisition now fully integrated, this is arguably the most strategically positioned EDA franchise on the market.

Yet shares of Synopsys are up just 2.32% year to date, trading at $480.64. So can SNPS hit $700 by 2027? That is the question I want to answer.

What’s Holding Synopsys Back Right Now The honest answer: investors punished a beat-and-raise quarter. Shares fell 7% to 8.4% after Q2 FY2026 results despite revenue of $2.276 billion (up 42.0% YoY) and non-GAAP EPS of $3.35 beating the $3.1617 estimate. The market focused on Design IP weakness, where revenue fell 6% YoY as hyperscalers built proprietary IP.

GAAP net income collapsed to $17.1 million, crushed by $403.6 million in Ansys intangibles amortization. Shares are down 4.63% over the past week and 0.67% over the past month. With a beta of 1.245, drawdowns hit hard.

Wall Street Sees 13% Upside. Our Model Says More. The Street consensus target sits at $544.99, with 2 Strong Buy, 15 Buy, 7 Hold, 0 Sell, and 1 Strong Sell ratings. Our base case for May 2027 is $604.09, implying 25.68% upside, with a bull case of $680.80 and a bear case of $524.43.

Confidence on the base case is 90%, which I read as high conviction. My pushback on consensus is simple. Analysts are anchoring on the messy GAAP optics. With 68% bullish ratings already, the bar to expand multiples is lower than the Street is pricing.

The Path to $700 Per Share Reaching $700 from today’s price of $480.64 would require a gain of 45.6%. With forward EPS of $14.82, a price of $700 implies a forward P/E of 47x. Our base case of $604.09 already implies 36x, meaning the bold target requires 11x of additional multiple expansion.

That is a stretch. But the conditions for compression rather than expansion are quietly building. CEO Sassine Ghazi told investors, “AI is scaling semiconductor demand, architectural diversity and complexity of chips and the systems they power, driving demand across our portfolio.”

Citigroup just raised its target to $610 and Rosenblatt to $575. Add Elliott Management’s board seat for Jesse Cohn, which validates a margin improvement thesis. The primary risk: a prolonged Design IP decline that drags the growth narrative back down.

The Valuation Case for Synopsys Right Now At $480.64 against forward EPS of $14.82, SNPS trades at roughly 32x forward earnings. That looks expensive next to the broader market but cheap versus where EDA peers trade when revenue compounds at 40%-plus. Shares sit between the 52-week high of $651.73 and low of $376.18, with a 10-year return of 828.77%. That kind of long-term compounding is the bull case in one statistic.

Is $700 Realistic? Here’s My Take $700 by 2027 is a stretch. It demands 45.6% upside and 11.4x of additional multiple expansion above our base case.

Three things need to break right: Ansys synergies must flow through to GAAP margins, Design IP needs to stabilize, and China revenue has to recover in H2. Elliott’s activist pressure helps the margin story.

What derails it is a structural hyperscaler pivot away from licensed IP. Returns at this level shouldn’t be expected every year, but we’ve outlined the blueprint for how Synopsys could reach $700 in 2027.

NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) disclosed an expanded strategic partnership with Synopsys (NASDAQ:SNPS) tied to a $2 billion strategic investment earlier this year, and February reporting on the chipmaker’s most recent 13F flagged Synopsys as one of NVIDIA’s top holdings in Q4 2025, alongside Intel. Synopsys itself confirmed a $2.0 billion private placement of stock in Q1 FY2026, with proceeds earmarked to accelerate debt repayment from the Ansys deal. For retirement-focused investors who track smart money, this is the rare strategic position where the buyer and the customer are the same entity.

What NVIDIA Bought, and Why It Matters NVIDIA is the world’s most important chip designer, and Synopsys is the company whose software it uses to design those chips. The $2 billion commitment lands as Synopsys digests its $35 billion Ansys acquisition, which closed in July 2025 and fused electronic design automation with physics-based simulation. CEO Jensen Huang has framed the moment plainly, calling the AI factory buildout “the largest infrastructure expansion in human history.” Every Blackwell 300 die, every Vera Rubin tile, and every networking ASIC NVIDIA ships runs through Synopsys tools first. Owning a stake in that toolchain is vertical integration without the operating risk.

The Thesis the Data Supports Synopsys is monetizing AI complexity directly. Q2 FY2026 revenue hit $2.28 billion, up 42% year over year, with non-GAAP EPS of $3.35 beating consensus by 5.96%. The Design Automation segment, roughly 80% of revenue, posted adjusted operating margins of 43.3%, up from 40.9% a year earlier. Management raised FY2026 revenue guidance to a midpoint of $9.665 billion and non-GAAP EPS to $14.72 to $14.80, with free cash flow targeted at roughly $2.0 billion. CEO Sassine Ghazi attributed the strength to “AI scaling semiconductor demand, architectural diversity and complexity of chips and the systems they power.”

The thesis is reinforced by activist Elliott Investment Management, which acquired a multibillion-dollar stake and won a board seat for managing partner Jesse Cohn in May. Elliott is pushing for margins closer to Cadence’s, and the post-Ansys cost structure gives them room to deliver.

Returns So Far and the Retail Calculus Synopsys shares closed at $508.35 on June 2, 2026, up 9.05% over the past year and 8.22% year to date. That trails the broader AI complex, NVIDIA itself is up 62.23% over the past year, which is precisely why the setup is interesting. Analyst consensus carries a target of $560.38 with 17 Buy or Strong Buy ratings against 1 Strong Sell. Forward earnings multiple sits near 33, full but not extreme for a software business growing 42%.

The risks are real. Roughly $10 billion in long-term debt remains from the Ansys financing, the Design IP segment is being restructured around a planned Processor IP Solutions divestiture, and export controls remain a swing factor.

The Take Following NVIDIA into Synopsys warrants independent research and due diligence. The strategic logic is unambiguous: AI is making chip design exponentially harder, Synopsys sells the tools that solve that problem, and its largest customer just put $2 billion on the table to keep the roadmap moving. Retirement investors get a high-quality compounder with AI exposure that does not require betting on the next GPU cycle. The September 30, 2026 Investor Day is the next catalyst worth watching.

Synopsys (SNPS - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.

Over the past month, shares of this maker of software used to test and develop chips have returned -1.3%, compared to the Zacks S&P 500 composite's +4.6% change. During this period, the Zacks Computer - Software industry, which Synopsys falls in, has gained 6.5%. 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.

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.

Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.

For the current quarter, Synopsys is expected to post earnings of $3.64 per share, indicating a change of +7.4% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.6% over the last 30 days.

The consensus earnings estimate of $14.49 for the current fiscal year indicates a year-over-year change of +12.2%. This estimate has changed -0.3% over the last 30 days.

For the next fiscal year, the consensus earnings estimate of $16.99 indicates a change of +17.2% 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 #4 (Sell).

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.

For Synopsys, the consensus sales estimate for the current quarter of $2.44 billion indicates a year-over-year change of +40.1%. For the current and next fiscal years, $9.68 billion and $10.66 billion estimates indicate +37.2% and +10.1% changes, respectively.

Last Reported Results and Surprise HistorySynopsys reported revenues of $2.28 billion in the last reported quarter, representing a year-over-year change of +41.9%. EPS of $3.35 for the same period compares with $3.67 a year ago.

Compared to the Zacks Consensus Estimate of $2.25 billion, the reported revenues represent a surprise of +1.13%. The EPS surprise was +5.68%.

Over the last four quarters, Synopsys surpassed consensus EPS estimates three times. The company topped consensus revenue estimates three times 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 #4 does suggest that it may underperform the broader market in the near term.

Key Takeaways Synopsys embeds AI across products and workflows to automate engineering and boost productivity.Synopsys customers used DSO.ai in 700 tape-outs; VSO.ai reached up to 90% of SoC blocks.Synopsys says AI enables up to 50% faster knowledge help and 5x faster testbench generation. Synopsys (SNPS - Free Report) is gaining from a multi-trillion-dollar 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 is looking at AI as a strategy that the company is implementing in multiple layers. Synopsys has implemented AI in its product layer, which it calls XSO.ai. Second is customer-specific AI, where customers train AI on their own workflow to create knowledge-assistant tools. Synopsys is also implementing Agentic generative AI now.

Synopsys also provides DSO.ai and VSO.ai. DSO.ai is an optimization engine focused on tape-outs, while VSO.ai is being used more deeply in SoC blocks and verification workflows. Synopsys’ customers have used DSO.ai to optimize more than 700 cumulative tape-outs, and VSO.ai has been deployed in up to 90% of SoC blocks on some chips.

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 is using AI in two ways, which include making chip design faster and better and preparing for a broader shift where AI becomes a more autonomous workflow layer across design, verification and simulation. These factors are likely to keep SNPS as one of the key contributors in the AI value chain in the long term.

How Competitors Fare Against SNPSSynopsys faces tough competition from EDA vendors, such as Cadence Design Systems Inc. (CDNS - Free Report) and Keysight Technologies (KEYS - 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 the new product launches like AgentStack, along with ChipStack, ViraStack and InnoStack AI Super Agents, are expected to aid in sustaining the momentum.

SNPS’ Price Performance, Valuation and EstimatesShares of SNPS have gained 5.2% year to date against the Computer - Software industry’s decline of 10.2%

SNPS YTD Performance Chart
Image Source: Zacks Investment Research

From a valuation standpoint, SNPS trades at a forward price-to-sales ratio of 9.23X, higher than the industry’s average of 7.1X.

SNPS Forward 12-Month (P/S) Performance Chart
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for SNPS’ fiscal 2026 earnings is pegged at $14.49, indicating 12% year-over-year growth. Estimates have been revised upward in the past seven days.

Image Source: Zacks Investment Research

SNPS currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Synopsys (NASDAQ:SNPS | SNPS Price Prediction) is the picks-and-shovels king of the AI chip boom, and right now Wall Street is acting like it forgot. CEO Sassine Ghazi summed it up on the latest call: “AI is scaling semiconductor demand, architectural diversity and complexity of chips and the systems they power, driving demand across our portfolio.”

Yet Synopsys is down 1.04% YTD and sitting at $464.85. The question I want to answer: can SNPS reclaim $600 by March 2027?

What’s Holding Synopsys Back Right Now The disconnect is real. Q2 FY26 revenue grew 42% YoY to $2.28 billion and non-GAAP EPS of $3.35 beat the $3.16 estimate. So why is the stock down 7.84% over the past month and 2.26% over the past week?

Three reasons. First, the $35 billion Ansys deal loaded the balance sheet with roughly $10 billion in long-term debt, and integration risk is real.

Second, the Design IP segment is softening, with a planned Processor IP Solutions divestiture.

Third, Zacks slapped a Rank #4 (Sell) on the name, flagging premium valuation and margin compression. With a beta of 1.214, every macro tremor gets amplified here.

Wall Street Sees 21% Upside. Our Model Says More The Street consensus target is $560.38, with 2 Strong Buy, 15 Buy, 7 Hold, 0 Sell, and 1 Strong Sell ratings. That’s 68% bullish sentiment, but I think it’s still too cautious.

Our base case lands at $568.87 for 22.38% upside, with a confidence score of 90% (high). The bull case prints $669.53, the bear case $499.78. The consensus is anchoring on FY26 as a trough year and missing the FY27 synergy ramp.

The Path to $600 Per Share Here is the math. Reaching $600 from today’s price of $464.85 would require a gain of 29.1%.

With forward EPS of $14.86, a price of $600 implies a forward P/E of 40x. Our base case of $568.87 already implies 35x, meaning the bold target requires 6x of additional multiple expansion.

Is that achievable? I think yes, and here’s why. Three live catalysts feed expansion: the Samsung Foundry expansion validating AI design flows on 2nm nodes, the Monte Independent thesis calling for significant FY27 revenue and cost synergies from Ansys, and Norges Bank’s new $730 million position signaling institutional conviction.

Management raised FY26 guidance to EPS of $14.72 to $14.80. The primary risk is a delayed Ansys integration that pressures margins into FY27.

Where Synopsys Trades Today vs Its Earnings Power SNPS trades at roughly 31x forward earnings against a 52-week range of $376.18 to $651.73. The stock is sitting 14% below its 52-week high, smack in the mid-range. Over 10 years, SNPS has returned 781.07%. That is the real earnings power story. Compared to the trailing P/E of 106x, the forward multiple looks reasonable if you believe FY27 EPS estimates.

$600 Is a Stretch, But Here’s Why It’s Possible $600 requires a 29.1% gain from here. My honest verdict: realistic, not guaranteed.

Three things need to go right. Ansys synergies have to start showing in the FY27 guide, Design IP weakness must stabilize, and AI-driven EDA bookings need to keep compounding. What derails it is an Entity List escalation that throttles China exposure. Returns at this level shouldn’t be expected every year, but we’ve outlined the blueprint for how Synopsys could reach $600 in 2027.

Key Takeaways Synopsys Design IP revenues fell to $454.2M in fiscal Q2 2026 from $482M a year earlier.SNPS is shifting resources toward AI markets, including custom silicon and hyperscaler demand.Synopsys expects second-half recovery from growth in UCIe, HBM4 and AI silicon IP offerings. Synopsys’ (SNPS - Free Report) Design IP segment faced pressure in the second quarter of fiscal 2026. Revenues declined to $454.2 million from $482 million in the year-ago quarter, while adjusted operating margin fell to 24% from 31%. The weakness was not limited to a single quarter, as the segment’s adjusted operating margin for the first six months of fiscal 2026 was 21%, down from 30% in the same period last year.

Furthermore, Synopsys continues to carry a sizable debt load following its recent acquisitions and strategic investments. As of April 30, 2026, the company had $10.014 billion in long-term debt compared with $2.484 billion in cash, cash equivalents and short-term investments. The debt burden is contributing to higher financing costs, affecting the bottom line.

The Design IP segment experienced margin pressure in the second quarter of fiscal 2026 as Synopsys continued to reposition the business toward higher-growth artificial intelligence opportunities. Management attributed the decline primarily to reduced revenues as resources are being reallocated toward the most attractive AI-driven markets, including custom silicon and hyperscaler demand.

Despite the near-term weakness, Synopsys expects the IP business to recover sequentially through the second half of fiscal 2026, supported by its expanding pipeline in high-speed connectivity, UCIe, HBM4 memory interfaces and customized AI silicon solutions. As these premium offerings gain traction, the company believes the Design IP business will generate higher-value engagements and stronger long-term profitability, making the current margin pressure largely an investment in future growth.

How Competitors Fare Against SNPSSynopsys faces tough competition from EDA vendors, such as Cadence Design Systems Inc. (CDNS - Free Report) and Keysight Technologies (KEYS - 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 the new product launches like AgentStack, along with ChipStack, ViraStack and InnoStack AI Super Agents, are expected to aid in sustaining the momentum.

SNPS’ Price Performance, Valuation and EstimatesShares of SNPS have lost 2.9% year to date compared with the Zacks Computer - Software industry’s decline of 19.6%.

SNPS YTD Performance Chart
Image Source: Zacks Investment Research

From a valuation standpoint, SNPS trades at a forward price-to-sales ratio of 8.50X, higher than the industry’s average of 6.35X.

SNPS Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for SNPS’ fiscal 2026 earnings is pegged at $14.75, indicating 14.3% year-over-year growth. Estimates have been revised upward in the past 30 days.

Image Source: Zacks Investment Research

SNPS currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.