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With an impressive market cap of $90.4 billion, Synopsys, Inc. (SNPS) is a leading electronic design automation (EDA) software vendor for the semiconductor and electronics industries. Headquartered in California, its product offerings include logic synthesis, functional verification, physical synthesis, physical design, and physical verification tools, as well as reusable design building blocks and intellectual property (IP) for semiconductor design and manufacturing.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and Synopsys fits right into that category. Its market cap exceeds this threshold, reflecting its substantial size, stability, and influence in the chip sector. The company is focused on innovation, investing heavily in research and development to provide cutting-edge solutions to customers and stay ahead of competitors. As a result, Synopsys is a long-standing market leader in EDA, with a broad range of software solutions and semiconductor IP offerings.
SNPS’ shares are currently trading 5% below its 52-week high of $629.38, touched on February 22. Moreover, shares of Synopsys have gained 8.8% over the past three months, surpassing the Dow Jones Industrial Average Index’s ($DOWI) marginal dip over the same time frame.
Longer term, SNPS is up 16.3% on a YTD basis, and the stock has soared 35.7% over the past 52 weeks, significantly outpacing DOWI’s 2.6% return in 2024 and 12.7% gains over the past year.
SNPS has consistently traded above its 200-day moving average over the past year and above the 100-day moving average since early May despite some fluctuations, indicating an uptrend.
Despite macroeconomic challenges, Synopsys's robust performance in the past year can be attributed to the strong demand for its semiconductor R&D offerings amid the AI boom.
Moreover, SNPS stocks were on an upward trajectory for four consecutive trading sessions following May 22, after the company reported strong Q2 earnings results. The company reported revenue of $1.5 billion, up 15.2% year over year, and non-GAAP EPS of $3, up 26.1% year over year, exceeding guidance. The company also raised its full-year revenue and non-GAAP EPS targets due to its strong performance and continued business momentum.
To emphasize Synopsys’ outperformance, its shares slightly outpace its competitor, Cadence Design Systems, Inc. (CDNS), which surged 33.2% over the past 52 weeks and 15.4% on a YTD basis.
Further, analysts are optimistic about the stock's prospects. The stock has a consensus rating of “Strong Buy” from 15 analysts covering it, and the stock’s mean price target of $617.87 reflects a modest upside potential of 3.3% from the current price level.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
