Synopsys (SNPS) Stock Forecast & Price Target

Synopsys is expected to continue benefitting from the expansion of EDA customers, fueled by the convergence of semiconductor and system companies, as well as the digitalization of various end markets, particularly in the area of AI chip design. The recent sale of its Processor IP solutions business to Global Foundries allows Synopsys to focus more on its Physical AI business and retain key IP portfolios in areas of logic libraries, interface, and security. With a positive outlook on the company's financials, including a projected 36% revenue growth in FY26 and a strong operating margin of 42%, Synopsys is likely to maintain its position as a leading EDA vendor and deliver positive returns for investors.

Synopsys is a leading electronic design automation software and intellectual property provider, with a strong market position in the digital segment and the second highest revenues in IP after ARM Holdings. The company is expected to grow revenues by 36.6% in FY26 to $9.636b and to grow revenues in 2027 by ~10.7% y-o-y. However, with recent comparable multiple compression and concerns over ongoing IP and China weakness, the company's target price has been lowered to $530 (previously $560), based on FY27 estimates. If Synopsys were to lose market share in key areas, its revenue, earnings, and multiple may be negatively impacted. Additionally, any constraints placed by U.S. or international governments could also adversely affect the company's operations and financials.