New York, May 28, 2026, 16:02 (EDT)
- Synopsys shares slid about 9.4% to $476.40, lagging Cadence Design Systems and a firmer semiconductor tape.
- Synopsys lifted its fiscal 2026 revenue and adjusted profit outlook after beating second-quarter sales projections.
- Jesse Cohn from Elliott Investment Management is set to take a seat on the Synopsys board June 1 after a cooperation deal, the company said.
Synopsys shares fell about 9% on Thursday. The company upped its annual outlook, but traders shrugged off the AI sales story, citing softer chip-IP demand, costs tied to recent deals, and ongoing worries over catching up to Cadence Design Systems’ margins.
Synopsys shares were last at $476.40, down $49.52 from Wednesday’s finish. Cadence eased 0.3%. The VanEck Semiconductor ETF added 0.9%.
The move is key because Synopsys is a main EDA stock for investors. EDA—electronic design automation—is the software chipmakers use to build and test semiconductors before production. Demand for these tools has climbed as Nvidia, AMD and the big cloud names build more advanced AI chips.
Synopsys posted Q2 revenue of $2.276 billion, up from $1.604 billion last year. Adjusted earnings came in at $3.35 a share. On a GAAP basis, profit was 9 cents per share, down from $2.24. The company raised its full-year outlook, now guiding revenue to $9.625 billion to $9.705 billion and adjusted EPS of $14.72 to $14.80.
Synopsys CFO Shelagh Glaser called the quarter a setup for “a strong second half,” pointing to execution and financial discipline. The company lifted its targets for operating margin and free cash flow. Synopsys News Releases
Bears found some ammo in the segment numbers. The Design IP unit, which sells chip design blocks, brought in $454.2 million, down from $482.0 million last year. Adjusted operating margin for Design IP dropped to 24.4% from 31.2%. Design Automation, now with Ansys added in, showed much better results.
CEO Sassine Ghazi pitched AI as a big driver, saying “AI is scaling semiconductor demand” as chips and systems get harder to design. Ghazi told Reuters Synopsys is also setting up customer deals around AI software tools, like “agent engineers,” and negotiating separate royalty deals for its IP business. Synopsys News Releases
Chip demand from hyperscalers is giving Synopsys a path in, the company said. “You cannot build your own chips without the participation of Synopsys IP,” Ghazi told Reuters. Reuters
Elliott’s agreement brings a new twist. Synopsys said activist investor managing partner Jesse Cohn will join the board as an independent director on June 1, bringing the total to 11 seats. Cohn said Synopsys is “essential to the global chip industry” but argued its financials should do a better job of showing the company’s value. Synopsys News Releases
Cadence is in this story too. Reuters said Elliott wanted Synopsys to match Cadence on margins and execution. Synopsys and Cadence lead the EDA market for chip design software and IP.
Ansys is still at the heart of things. Synopsys closed the acquisition in July 2025, merging its chip-design platform with Ansys’s simulation and analysis tools. The combined group said it targets a $31 billion market.
The risks are still clear. If Design IP stays weak, if Ansys synergies take longer than expected, or if U.S. export control rules shift again, the higher outlook could end up unresolved. Synopsys said its targets count on no new moves in export-control rules or the U.S. government Entity List.
Tests for Synopsys keep coming. The company will hold an investor day Sept. 30, with management set to detail long-term targets and strategy. With the stock down on Thursday, investors may push for details and evidence rather than broad vision.
