Synopsys Stock Surges on Strong Long-Term Forecast and AI Deals with OpenAI, AWS

Shares of Synopsys (SNPS) jumped more than 10% on Thursday after the chip-design software company issued a bullish long-term financial forecast and announced strategic collaborations with OpenAI and Amazon Web Services (AWS). The announcements, made at the company's investor day, signal strong confidence in sustained growth driven by the increasing complexity of semiconductors for artificial intelligence applications.

Upbeat Financial Outlook

Synopsys provided a financial outlook for its fiscal year 2027 that significantly surpassed Wall Street expectations. The company also outlined ambitious long-term growth targets and a new share repurchase program.

• FY 2027 Revenue: Forecast to be between $11.10 billion and $11.20 billion, ahead of the analyst consensus of $10.81 billion, according to LSEG data.
• FY 2027 EPS: Projected to be in the range of $19.04 to $19.12 per share, compared to the average estimate of $17.81.
• Long-Term Growth: The company is targeting approximately 15% compound annual revenue growth from fiscal 2026 through 2030, with an adjusted operating margin of about 50% by 2030.
• Share Buyback: Synopsys plans to repurchase about $1 billion of its shares in the coming months.

Strategic AI and Cloud Partnerships

Underpinning its optimistic forecast, Synopsys unveiled two major deals with leaders in AI and cloud computing. The company signed a multi-year agreement with Amazon.com's AWS, valued at more than $1 billion, to license its chip-design intellectual property.

Ad

Separately, Synopsys announced a revenue-sharing deal with OpenAI to jointly develop a specialized AI model for the semiconductor industry. These partnerships highlight the critical role of Synopsys's electronic design automation (EDA) tools in creating the next generation of advanced chips.

Market Reaction

The company's presentation was well-received by the market and analysts. In a note to clients, brokerage Berenberg stated the investor day "provided significantly more than the market expected." The positive sentiment is reflected in broader analyst coverage.

According to LSEG data, 22 of the 24 analysts covering Synopsys rate the stock as "buy" or higher, with the remaining two rating it a "hold." The robust guidance and high-profile partnerships reinforce the view that Synopsys is a key beneficiary of the massive investment flowing into the AI sector.