December 11, 2025
Synopsys, Inc. (NASDAQ: SNPS) is back in the spotlight after a brutal autumn sell-off, powered now by a new strategic partnership with Nvidia, better‑than‑expected fourth‑quarter results and an ambitious forecast for fiscal 2026.
As of late‑morning trading on December 11, Synopsys shares were trading around $476, up roughly 2% on the day and extending gains after closing at $475.83 on Wednesday. [1] The stock is up about 12% over the past three months but remains roughly 7% lower over the last year, reflecting the damage from a 35–36% single‑day plunge in September tied to disappointing China‑related revenue and concerns about its Design IP business. [2]
Below is a detailed look at what has changed for Synopsys as of December 11, 2025 — from earnings and guidance to lawsuits, layoffs and Wall Street sentiment.
Where Synopsys Stock Stands on December 11, 2025
Market data providers show Synopsys trading just under the $480 level, with a 12‑month range of about $366 to $652 and a current market capitalization near $88 billion. [3]
On current numbers, Synopsys trades at roughly:
- ~37x trailing earnings, based on a P/E ratio of 37.35.
- ~32x forward earnings, according to a 24/7 Wall St. analysis that pegs the forward multiple at about 31.8x. [4]
That valuation is rich versus the broader market but not unusual for a software‑heavy, IP‑rich name tied to secular growth in AI and advanced chip design.
From a performance perspective:
- The stock collapsed nearly 36% on September 10, falling from $604.37 to $387.78 in a single session after the company disclosed deteriorating economics in its Design IP segment and China uncertainty. [5]
- Since then, Nvidia’s strategic stake, improving guidance and relief that Q4 did not bring another major negative surprise have helped shares retrace a meaningful portion of those losses.
Q4 2025: Record Revenue, EPS Beat, But Mixed Under the Hood
Synopsys reported fiscal fourth‑quarter 2025 results after the close on December 10.
Headline numbers
According to the company’s earnings release and subsequent coverage:
- Q4 revenue: about $2.26 billion, up nearly 38% year over year and slightly above Wall Street expectations around $2.25 billion. [6]
- Ansys contribution: the recently acquired simulation leader Ansys added approximately $667.7 million of revenue in the quarter. [7]
- Non‑GAAP (adjusted) EPS: $2.90, ahead of consensus estimates near $2.78–$2.79, but down from $3.40 a year earlier. [8]
- GAAP EPS: $2.39, up sharply from $1.79 in the prior‑year quarter. [9]
Several outlets described the quarter as a clean beat on both revenue and adjusted earnings, even if year‑over‑year EPS declined due to integration costs and higher amortization tied to Ansys. [10]
Full‑year results and backlog
For fiscal year 2025 as a whole, Synopsys reported:
- Record revenue of about $7.05–$7.1 billion, up roughly 15% from the prior year. [11]
- Non‑GAAP EPS of $12.91, compared with $13.20 in 2024. [12]
- Non‑GAAP operating margin of 37.3%. [13]
- A backlog of $11.4 billion, up from $10.1 billion last quarter, which management highlighted as evidence of durable demand. [14]
- Free cash flow of about $1.35 billion and cash plus short‑term investments of $2.96 billion against $13.5 billion of total debt. [15]
Segment dynamics: strength in design automation, pressure in IP
Synopsys divides its business into two main segments: Design Automation (EDA and related tools, now including Ansys) and Design IP.
For 2025:
- Design Automation revenue reached roughly $5.3 billion, growing about 26% year over year.
- Design IP revenue was approximately $1.75 billion, down about 8%. [16]
Analysts have repeatedly flagged the IP slowdown as the most sensitive area, both because it was at the center of September’s shock guidance cut and because the class action lawsuits now targeting Synopsys revolve specifically around alleged misstatements about the economics of this business. [17]
Margin story: mostly positive, but free‑cash‑flow worries
On the Q4 print, non‑GAAP operating margin hit 36.5%, beating Wall Street’s expectations around 35–36%, according to Stifel and Investing.com. [18]
However, Piper Sandler, which cut its price target from $630 to $602 while maintaining an Overweight rating, highlighted:
- Slower EDA growth than it would like.
- Weaker free‑cash‑flow margins, even as the company undertakes layoffs and integration. [19]
Taken together, Q4 reassured investors that the floor from September’s shock is holding, but it did not fully erase concerns about IP growth and cash conversion.
2026 Outlook: Big Growth, Bigger Ambitions
The real fireworks for Synopsys stock came from its 2026 guidance, which the market viewed as quite bullish, especially on earnings.
Full‑year 2026 guidance
Synopsys guided for fiscal 2026 to include:
- Revenue between $9.56 billion and $9.66 billion, with a midpoint of $9.61 billion. [20]
- That implies roughly mid‑30% top‑line growth from 2025’s $7.05 billion, heavily driven by a full year of Ansys revenue (about $2.9 billion expected from Ansys in 2026) and some organic growth. [21]
- Non‑GAAP EPS in a range of $14.32–$14.40, with a midpoint around $14.36 — comfortably above many pre‑earnings analyst estimates, which tended to cluster around the low‑$14 range and even lower on some data providers. [22]
- A targeted non‑GAAP operating margin of roughly 40.5% at the midpoint, reflecting expected cost synergies from Ansys, restructuring benefits and scale. [23]
Q1 2026: “Transitional” but not weak
For the first quarter of 2026, Synopsys forecast:
- Adjusted EPS of $3.52–$3.58, above consensus estimates that ranged roughly from $3.32 to $3.42. [24]
- Revenue of $2.36–$2.42 billion, essentially in line with Wall Street at about $2.38–$2.39 billion. [25]
Management and multiple analyst notes describe fiscal 2026 as a “transitional year,” especially for the IP segment, as Synopsys works through contract structures, integrates Ansys and ramps cross‑selling. [26]
Nvidia’s $2 Billion Stake: A Strategic AI Alliance
The single biggest narrative shift around Synopsys this month has been Nvidia’s decision to invest $2 billion in the company and deepen their partnership.
The deal
On December 1, Synopsys and Nvidia announced:
- A multi‑year strategic partnership spanning CUDA GPU‑accelerated computing, “agentic AI” (AI systems that can autonomously perform tasks), and high‑fidelity digital twins via Nvidia Omniverse, Cosmos and related stacks.
- Nvidia will help accelerate Synopsys applications across chip design, physical verification, molecular and electromagnetic simulation, optical design and more.
- Nvidia made a $2 billion equity investment in Synopsys common stock at $414.79 per share. [27]
Nvidia CEO Jensen Huang emphasized that GPU‑accelerated simulation and digital twins can expand the market for computing “from atoms to transistors, from chips to complete systems,” while Synopsys CEO Sassine Ghazi framed the partnership as a way to deliver AI‑powered, end‑to‑end engineering solutions. [28]
Market reaction
The announcement triggered an immediate relief rally:
- One analysis noted Synopsys stock jumped almost 5% after the Nvidia stake was disclosed, reframing the stock’s long‑term growth story just weeks after the September plunge. [29]
- A 24/7 Wall St. piece argued that at around 31.8x forward earnings, Synopsys “is starting to look cheap,” suggesting Nvidia may have secured a bargain if the AI boom has more room to run. [30]
Social‑media monitoring from Quiver Quantitative shows a surge in discussion about SNPS, with many investors viewing the Nvidia deal as a transformative AI catalyst, though others caution that macro and semiconductor‑cycle risks have not disappeared. [31]
The partnership meshes with Synopsys’ own push into AI‑driven EDA tools, including its “AgentEngineer” technology and broader commentary about AI “supercharging” chip‑design workflows. [32]
Restructuring and Layoffs: 10% Workforce Reduction
Behind the upbeat guidance sits a substantial restructuring:
- On November 12, Synopsys disclosed plans to lay off about 10% of its workforce, or roughly 2,000 employees, in conjunction with the Ansys acquisition and a broader pivot toward high‑growth areas. [33]
- The company expects pre‑tax charges of $300–$350 million, mainly for severance, termination benefits and some site closures, with most of the cuts occurring during fiscal 2026 and the program largely completed by the end of fiscal 2027. [34]
- Management also plans to prepay about $2.55 billion of debt in the first half of 2026, helping to deleverage after the $35 billion Ansys deal. [35]
Analysts such as Stifel see these moves as part of a margin‑expansion and focus story, but the scale of layoffs also introduces execution and culture risk as Synopsys absorbs Ansys and shifts resources.
Legal Overhang: Securities Class Actions Tied to Design IP
A key reason Synopsys shares still trade well below their 2025 highs is legal risk stemming from the steep September decline.
Two major law firms, Bleichmar Fonti & Auld and Bernstein Liebhard, have announced securities fraud class actions against Synopsys and certain executives:
- The proposed class period runs from December 4, 2024 to September 9, 2025, covering investors who bought before the September crash. [36]
- The complaints allege that Synopsys made misrepresentations about its Design IP business, particularly that the economics were worsening as AI‑focused customers demanded more customization, increasing costs and extending project timelines. [37]
- One filing points to the stock’s collapse from $604.37 to $387.78 (about 36%) on September 10 after the company disclosed challenges in Design IP and signaled it might need to change its business model. [38]
- Investors have until December 30, 2025 to seek appointment as lead plaintiff in at least one of these suits. [39]
Synopsys has not publicly admitted wrongdoing, and the cases may take years to resolve. But they represent a non‑trivial overhang on the stock, especially for institutional investors sensitive to headline and legal risk. Recent AI‑chip commentary has also flagged these lawsuits as an example of the sector’s growing pains as demand and expectations reset. [40]
Wall Street’s View: Mostly Bullish, With Margin and IP Caveats
Despite the lawsuits and September drama, analyst sentiment remains broadly positive as of December 11.
Fresh ratings and targets this week
- Needham reaffirmed a Buy rating and raised its price target from $550 to $580 on December 11, citing confidence in Synopsys’ growth potential and the Nvidia partnership. [41]
- Goldman Sachs maintained a Buy rating and $560 target, noting that Synopsys’ fiscal 2026 EPS guidance tops expectations, even if the stock screens as trading above some fair‑value models. [42]
- Stifel reiterated its Buy/Outperform stance, with a target around $540, describing 2026 as a transitional year but highlighting the strong backlog and margin leverage from Ansys integration and planned debt reduction. [43]
- Piper Sandler cut its target from $630 to $602 but kept an Overweight rating, pointing to healthy growth, progress on China/IP risk management and benefits from the 10% workforce reduction, offset by concerns about slower EDA growth and free‑cash‑flow margins. [44]
Consensus and dispersion
Different data providers show slightly different snapshots, but the broad picture is consistent:
- MarketBeat reports 11 Buy ratings, 6 Hold and 1 Sell, with a consensus price target around $550–$551. [45]
- GuruFocus, aggregating 23 analysts, shows an average target of about $544.56, with a high of $630 and a low of $425, implying roughly 14% upside from the current ~$476 price. [46]
- Quiver Quantitative tracks a median 12‑month target around $565 across 14 analysts, with recent targets including $580 (Citigroup), $600 (Mizuho) and $445 (Wells Fargo), highlighting a wide band of disagreement about how quickly Synopsys can grow into its AI‑driven story. [47]
Overall, the consensus leans “Buy/Outperform”, with moderate upside and significant dispersion — a classic sign that the stock’s narrative is in flux.
Institutional and Insider Activity: Big Money Is Very Active
Institutional investors have been actively reshuffling their Synopsys exposure:
- A December 11 MarketBeat report notes that Natixis cut its Synopsys holdings by 62.2% in Q2, selling 11,738 shares and ending the quarter with 7,138 shares. [48]
- Another filing shows Jump Financial LLC boosting its stake by 1,431.6% to 7,612 shares. Larger players including Norges Bank, Generation Investment Management and Aspex Management have made significant moves in recent quarters, underpinning high institutional ownership of about 85–86% of the float. [49]
Quiver Quantitative’s data suggest:
- 977 institutional investors have added SNPS shares over their most recent quarter, while 570 have reduced positions.
- Major asset managers like Vanguard, Morgan Stanley, BlackRock and FMR increased stakes by hundreds of millions of dollars in Q3 2025 alone. [50]
On the insider side:
- Over the past six months, insiders executed 11 trades, 10 of them sales, including significant stock sales by the CEO, CFO and other senior executives, alongside a more modest purchase by a director. [51]
Insider selling is common in large, stock‑compensated tech companies, but the imbalance between selling and buying is something risk‑averse investors typically watch.
Strategic Position: AI, Chip Design and the EDA Duopoly
Fundamentally, Synopsys remains one of the two dominant players in electronic design automation (EDA), alongside Cadence Design Systems, with Siemens as a strong but smaller competitor in certain areas. [52]
Key structural points that underpin the bull case:
- AI everywhere: AI workloads require ever more complex, power‑efficient chips — which in turn demand sophisticated design, verification and simulation tools. Synopsys is deeply embedded in this stack, from front‑end design through verification and now multi‑physics simulation via Ansys. [53]
- Nvidia partnership as a force multiplier: GPU‑accelerated EDA and agentic AI design agents could meaningfully cut time‑to‑market for customers, potentially making Synopsys solutions even more “must‑have” and hard to dislodge. [54]
- High switching costs and backlog: The $11.4 billion backlog and long‑term customer contracts make revenue relatively sticky, though not immune to macro and regulatory shocks. [55]
On the risk side:
- Legal overhang from the Design IP lawsuits could lead to settlements, higher legal expenses, or distracting discovery processes. [56]
- Execution risk around integrating Ansys, realizing projected cost synergies and hitting a 40%+ operating margin while managing layoffs and culture. [57]
- China and export‑control exposure, which has already shown itself capable of causing abrupt revenue shortfalls for Synopsys and other chip‑related firms. [58]
Bottom Line: A Rebuilt Story With Real Risk
As of December 11, 2025, Synopsys stock sits at the intersection of several powerful but competing forces:
- A strong AI and chip‑design tailwind, reinforced by Nvidia’s $2 billion endorsement and a record backlog. [59]
- Robust guidance for 2026, with double‑digit EPS growth and mid‑30% revenue growth if management delivers on its plan. [60]
- A still‑uncertain IP segment, active securities‑fraud litigation and the operational complexity of a 10% workforce reduction and a $35 billion acquisition to digest. [61]
Most analysts remain constructive, seeing upside from current levels, but price targets span a wide range — from the low‑$400s to about $630 — reflecting genuine disagreement about how cleanly Synopsys can execute its AI‑era strategy. [62]
References
1. www.marketbeat.com, 2. au.investing.com, 3. www.marketbeat.com, 4. www.marketbeat.com, 5. www.globenewswire.com, 6. news.synopsys.com, 7. ng.investing.com, 8. news.synopsys.com, 9. news.synopsys.com, 10. www.alphaspread.com, 11. news.synopsys.com, 12. news.synopsys.com, 13. ca.investing.com, 14. news.synopsys.com, 15. ca.investing.com, 16. news.synopsys.com, 17. www.globenewswire.com, 18. www.investing.com, 19. www.tradingview.com, 20. news.synopsys.com, 21. ng.investing.com, 22. ng.investing.com, 23. ca.investing.com, 24. ng.investing.com, 25. ng.investing.com, 26. www.investing.com, 27. news.synopsys.com, 28. news.synopsys.com, 29. www.tikr.com, 30. 247wallst.com, 31. www.quiverquant.com, 32. news.synopsys.com, 33. www.reuters.com, 34. www.reuters.com, 35. ca.investing.com, 36. www.globenewswire.com, 37. www.globenewswire.com, 38. www.globenewswire.com, 39. www.globenewswire.com, 40. finance.yahoo.com, 41. www.gurufocus.com, 42. m.in.investing.com, 43. www.investing.com, 44. www.tradingview.com, 45. www.marketbeat.com, 46. www.gurufocus.com, 47. www.quiverquant.com, 48. www.marketbeat.com, 49. www.marketbeat.com, 50. www.quiverquant.com, 51. www.quiverquant.com, 52. www.reuters.com, 53. www.synopsys.com, 54. news.synopsys.com, 55. news.synopsys.com, 56. www.globenewswire.com, 57. www.reuters.com, 58. www.reuters.com, 59. news.synopsys.com, 60. ng.investing.com, 61. www.reuters.com, 62. www.gurufocus.com
