Synopsys: Durable EDA Core with High-Value IP, Ansys Synergies, and AI Upside Support Buy Rating

J.P. Morgan analyst Harlan Sur has maintained their bullish stance on SNPS stock, giving a Buy rating yesterday.

Harlan Sur has given his Buy rating due to a combination of factors that highlight Synopsys’ solid core business and meaningful future growth drivers. He views the company’s IP segment as a long‑term value creator, despite a transitional period expected in 2026, as management is actively shifting toward higher‑value customized IP and royalty‑based models that should enhance monetization in 2027–2028. While export controls and China‑related risks are a near‑term drag, these have been incorporated into forward guidance, and the IP business still offers attractive growth and margin potential over time. In addition, Sur underscores that Synopsys remains a strategic supplier in the ecosystem, particularly for cloud hyperscalers and ASIC vendors that depend on external IP, which supports durable demand.

Harlan Sur’s rating is based on the view that Synopsys’ highly predictable core EDA franchise, combined with incremental catalysts from Ansys integration and AI, provides a compelling risk‑reward profile. The Ansys acquisition is expected to unlock revenue synergies by embedding Ansys capabilities (such as thermal analysis) into Synopsys’ tools and by distributing more Synopsys system‑level products through Ansys’ robust sales channels. Sur also highlights the upside from AI and accelerated computing: AI‑driven changes to chip design flows, growing needs for digital twin and simulation, and the deep collaboration with NVIDIA (including CUDA, cuLitho, and Omniverse) all position Synopsys to capture higher value per design over time. Taken together, these elements support his positive stance on the shares and justify a Buy recommendation.

In another report released yesterday, Citi also reiterated a Buy rating on the stock with a $580.00 price target.

Based on the recent corporate insider activity of 60 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of SNPS in relation to earlier this year.