Synopsys price target lowered to $630 from $660 at Piper Sandler

Piper Sandler lowered the firm’s price target on Synopsys (SNPS) to $630 from $660 and keeps an Overweight rating on the shares. The firm says some concerning items came out of Q3, primarily tied to the IP business with Synopsys outlining three headwinds that likely will have multi-quarter impacts. China export restrictions in Q3 delayed design starts, which impacted IP revenues, but even postrestriction lift, Chinese customer confidence has been shaken and spending appetite has waned considerably. A large foundry customer is pivoting its technology which means IP blocks developed for that customer will no longer yield results in the second half of 2025. Synopsys is undertaking a reallocation of resources in IP to better align with growth opportunities in the industry. While no timeline was given, this sounds like a multi-quarter process with lower growth in the interim, Piper adds. Shares will likely be pressured after the print, but the firm believes clarity can improve with some levers like 10% RIF by FY26 potentially accelerating profitability goals.