Is SNPS a good stock to buy? We came across a bullish thesis on Synopsys, Inc. on Monte Independent Investment Research’s Substack by Monte Investments. In this article, we will summarize the bulls’ thesis on SNPS. Synopsys, Inc.’s share was trading at $524.74 as of May 25th. SNPS’s trailing and forward P/E were 80.54 and 36.36 respectively according to Yahoo Finance.
Synopsys, Inc. provides design IP solutions in the semiconductor and electronics industries. SNPS is entering a transformational phase in FY26 as the company integrates Ansys into its broader portfolio, positioning itself to capitalize on accelerating demand across semiconductors, aerospace, mobility, industrial automation, and advanced manufacturing.
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Management expects joint solutions between the legacy Synopsys platform and Ansys to begin ramping through FY26 and contribute meaningfully in FY27, with the combination projected to generate a $400 million annualized revenue run rate within three years alongside $400 million in annual cost synergies within two years.
The integration is expected to be particularly powerful for Synopsys’ IP business, where simulation and physics-based analysis can be embedded directly into chip design workflows for increasingly complex multi-die architectures. Synopsys is also benefiting from secular AI infrastructure spending trends, with global semiconductor spending projected to approach $1 trillion by 2030 as hyperscalers diversify silicon architectures beyond GPUs into custom CPUs, networking, optics, and edge AI systems.
Nvidia’s multi-billion-dollar investments across optical networking, AI infrastructure, and GPU engineering further strengthen Synopsys’ long-term opportunity set, especially through joint R&D initiatives tied to Omniverse and physical AI applications. The company is additionally expanding collaborations with Arm Holdings and emerging AI chip developers, reinforcing its position at the center of next-generation semiconductor design.
Despite FY26 being viewed as a temporary trough year with roughly 6% organic growth, Synopsys is expected to deliver margin expansion, accelerate deleveraging, and improve shareholder returns through buybacks, setting the stage for stronger growth and revenue synergies beginning in FY27.
Previously, we covered a bullish thesis on Synopsys, Inc. (SNPS) by The Equity Analyst in February 2025, which highlighted the company’s leadership in electronic design automation and semiconductor IP supporting complex AI-driven chip designs. SNPS’s stock price has depreciated by approximately 1.24% since our coverage. Monte Investments shares a similar view but emphasizes the Ansys integration and AI infrastructure-driven revenue synergies.
Synopsys, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 91 hedge fund portfolios held SNPS at the end of the fourth quarter which was 83 in the previous quarter. While we acknowledge the risk and potential of SNPS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SNPS and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
