Synopsys Is the Nasdaq 100’s Top Stock Today. The Target Says It’s Not Done

Synopsys (NASDAQ:SNPS | SNPS Price Prediction) is the top performer in the NASDAQ 100 today. The stock is up 8.8% to about $474.28 following a busy Investor Day. The 24/7 Wall St. price target of $594.34 means 25.31% upside over the next 12 months.

24/7 Wall St. Price Target Summary

A 90% confidence reading is high for our model. The chip-design software leader has spent a year integrating Ansys, and AI is driving chip complexity to new levels.

OpenAI and Amazon Deals Ignite a 14% Weekly Rally

Synopsys has gained 14.56% over the past week. On September 30, Synopsys announced GPT-Synopsys with OpenAI and a multi-year IP agreement for custom silicon with Amazon (NASDAQ:AMZN), alongside a long-term financial model at its Investor Day.

Fundamentals back up the rally: fiscal Q3 revenue came in at $2.48B, ahead of the $2.44B estimate and up 42.4% year over year. Non-GAAP EPS of $3.91 exceeded expectations of $3.67. Management also raised full-year EPS guidance to $15.04 to $15.10.

Why Bulls See $685 Within Reach

The bull case of $685.40 depends on new AI revenue streams. Management said 20 customers were testing agentic EDA tools with “subscription plus consumption” pricing. Revenue synergies from combined Synopsys and Ansys technology are expected in FY27, with a $400 million revenue synergy target.

Analysts expect FY2027 EPS of $17.6932, with the high estimate at $20.0054. Of the 23 analysts covering the stock, none rate it Sell, and their consensus target is $553.77.

What Could Pull Synopsys Toward $514

Our bear case is $513.93. Main risks include export controls tied to China, total debt of about $10 billion, and restructuring charges planned for Q4. At roughly 76x trailing earnings, GAAP results look expensive, though Ansys amortization and integration costs drag down GAAP profit.

On a forward basis, the stock trades at 23x. Synopsys paid off $3.45B of debt in Q1 and expects free cash flow of about $2.6B this year.

Synopsys Trades Cheaper Than Its Closest Rival Despite Faster Growth

Cadence trades at roughly 32x forward earnings while growing revenue 24.2%. Synopsys is growing faster at a lower multiple, suggesting our target is reasonable and somewhat conservative.

Synopsys Still Has Room to Run

Our 24/7 Wall St. price target of $594.34 carries a buy rating at 90% confidence. The deciding factor is the valuation gap: faster growth than Cadence at a lower multiple.

The numbers point higher if Design IP rebounds and agentic pricing shows up in FY27 guidance.

Synopsys needs to execute on its silicon-to-systems strategy for these projections to hold. Faster agentic AI adoption could driving results higher; export restrictions could driving them lower.

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