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.
U.S. chip design giant Synopsys plans to stop offering a suite of manufacturing process control software used by global semiconductor makers, six sources briefed on the matter said, as it seeks to divert resources to higher-margin offerings such as AI design.
Synopsys (SNPS) has received quite a bit of attention from Zacks.com users lately. Therefore, it is wise to be aware of the facts that can impact the stock's prospects.
Synopsys (NASDAQ:SNPS | SNPS Price Prediction) sits at the center of every advanced chip designed today, and the math behind our model says the market is underpricing that moat.
Synopsys, Inc. is positioned for durable, multi-generational growth as chip complexity and AI adoption accelerate demand for EDA and Design IP solutions. Advancements like Multiphysics Fusion, GPU-accelerated EDA, and a sharpened IP portfolio post-processor IP divestiture underpin margin expansion and top-line growth. Cost and revenue synergies from the Ansys acquisition, alongside a strengthening balance sheet, support sustained margin improvement and operational leverage.
I rate Synopsys (SNPS) a Buy with a $657 price target, implying 43% upside from the current level of $461. The Ansys acquisition expands SNPS into system-level engineering, unlocking cross-selling, margin expansion, and a broader platform for AI-driven complexity. In my model, I estimate that core EDA contributes $4.13 of 2028-EPS, Ansys integration adds $1.26, and design IP adds $0.67. This gets me to a 2028 EPS-estimate of $20.92.
SNPS stands out in the AI boom with recurring revenues, expanding AI-driven design tools and IP licensing, while APLD faces customer concentration risks.