Stifel Maintains Buy Rating on Synopsys (SNPS) Following Strong Q2 Results

On May 29, 2025, Stifel analysts reiterated their Buy rating and $550 price target for Synopsys, Inc. (NASDAQ:SNPS) shares. The analysts said their decision is supported by their analysis of the company’s Q2 2025 performance.

A robotic arm holding a semiconductor chip, emphasizing the precision and quality of the company’s production equipment.

During the quarter, Synopsys posted $1.604 billion, exceeding the midpoint of guidance. The semiconductor software firm also reported a $400 million quarter-over-quarter increase in backlog. The calculated remaining performance obligations (cRPO) also rose by approximately $172 million. The company’s gross profit margin came in at 81.35%, and, according to the analysts’ evaluation, Synopsys’ fundamentals remain solid with 8.51% revenue growth and a substantial $73.15 billion market capitalization.

In the Q2 2025 earnings report, the company maintained its full-year outlook. This is despite concerns about the Chinese market uncertainties. According to Stifel’s findings, Synopsys’ management has not received any notification from the Bureau of Industry and Security (BIS) about halting China sales. However, a Reuters report on May 30 indicates that the company instructed its China staff to suspend all services and sales following new US export restrictions.

Be that as it may, Stifel analysts noted that Synopsys remains on track to finalize its acquisition of ANSS in the first half of the year. This suggests that, the analysts say, any restrictions on China sales could potentially simplify the completion of this pending deal.

Synopsys, Inc. (NASDAQ:SNPS) is a leading electronic design automation (EDA) company. It focuses on semiconductor design and verification, silicon intellectual property, and software security solutions. It provides tools for integrated circuit (IC) design, simulation, and debugging, serving semiconductor manufacturers, system designers, and software developers.

While we acknowledge the potential of Synopsys, Inc. (NASDAQ:SNPS) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than SNPS and that has 100x upside potential, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None.