What Makes Synopsys (SNPS) a Good Investment?

ClearBridge Investments, an investment management company, released its “ClearBridge All Cap Growth Strategy” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the second quarter, growth stocks led the stock market to rebound from tariff uncertainty. The benchmark Russell 3000 Growth Index performed better as risk-on sentiment took hold, rising 17.6% and outperforming the Russell 3000 Value Index by over 1,300 basis points. The Strategy underperformed its Russell 3000 Growth Index benchmark in the second quarter. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, ClearBridge All Cap Growth Strategy highlighted stocks such as Synopsys, Inc. (NASDAQ:SNPS). Synopsys, Inc. (NASDAQ:SNPS) offers electronic design automation software products used to design and test integrated circuits. The one-month return of Synopsys, Inc. (NASDAQ:SNPS) was -5.11%, and its shares gained 16.16% of their value over the last 52 weeks. On August 29, 2025, Synopsys, Inc. (NASDAQ:SNPS) stock closed at $603.32 per share, with a market capitalization of $111.641 billion.

ClearBridge All Cap Growth Strategy stated the following regarding Synopsys, Inc. (NASDAQ:SNPS) in its second quarter 2025 investor letter:

“In IT, we added Synopsys, Inc. (NASDAQ:SNPS) and Palantir Technologies. Synopsys is a leader in electronic design automation (EDA) software and custom chip designs, operating in a duopoly market with multiple avenues of growth driven by the increased complexity of semiconductor chips. The company’s EDA software and tools are mission critical and difficult to replicate, providing defense to its high-margin business model.”

Synopsys, Inc. (SNPS) Benefits From Its Relationship With NVIDIA, Says Jim Cramer

Synopsys, Inc. (NASDAQ:SNPS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 66 hedge fund portfolios held Synopsys, Inc. (NASDAQ:SNPS) at the end of the second quarter, which was 67 in the previous quarter. While we acknowledge the risk and 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 doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Synopsys, Inc. (NASDAQ:SNPS) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Synopsys, Inc. (NASDAQ:SNPS) and shared the list of best software stocks to buy. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

Disclosure: None. This article is originally published at Insider Monkey.