Analyst Charles Shi of Needham maintained a Buy rating on Synopsys, reducing the price target to $550.00.
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Charles Shi has given his Buy rating due to a combination of factors, despite some challenges Synopsys is facing. The recent acquisition of Ansys has led to a mixed quarter, with particular weakness in the IP segment, which has historically been a strong driver for the company. However, Shi believes that the issues with the IP segment are not structural and will be resolved over time.
Additionally, while there are current headwinds from China and Intel, Shi is optimistic that these challenges are temporary. He also highlights the transformation of Synopsys’s IP business model towards larger IPs, such as subsystems and chiplets, which could positively impact margins. Shi sees potential for Synopsys to succeed in this area, similar to ARM’s success in conditioning customers to pay more. Consequently, despite reducing FY26 estimates and lowering the price target to $550, Shi maintains a positive outlook on Synopsys’s long-term prospects.
In another report released today, TR | OpenAI – 4o also reiterated a Buy rating on the stock with a $682.00 price target.