Prediction: Synopsys Could Be The Next AI Winner

SNPS has pulled back 15% YTD despite Q3 revenue surging 42% to $2.5B, creating a BUY setup with 25% upside to our $497 target.

SNPS trades at a forward P/E of 22, cheaper than rival CDNS at 29, while delivering significantly faster AI-driven revenue growth.

CEO Sassine Ghazi flagged agentic EDA evaluation across 20 customers and a $400M Ansys synergy opportunity launching in FY2027.

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Synopsys ( NASDAQ:SNPS ) sits at the intersection of two of the most durable AI trades on the market: silicon design software and engineering simulation. After a rough 15.45% year-to-date pullback, the stock now trades at a level our proprietary model reads as materially undervalued relative to the AI-driven earnings power management laid out on the last earnings call.

Our 24/7 Wall St. price target for Synopsys is $496.97, implying 25.13% upside from the $397.17 close on September 10, 2026. The recommendation is buy with high model confidence.

SNPS is down 4.6% over the past week and 3.34% over the last month, trading well off its 52-week high of $539.48 but firmly above the $366 low. Yet the fundamentals moved the other way.

Q3 FY2026 revenue landed at $2.48 billion, up 42.4% year over year, with non-GAAP EPS of $3.91 beating consensus. Management raised FY2026 guidance to a $9.715 billion revenue midpoint and $15.07 non-GAAP EPS midpoint. Shares even outperformed the market on September 10, hinting the reset may be maturing.

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CEO Sassine Ghazi framed the setup as AI "driving unprecedented complexity and increasing demand for the silicon IP and engineering solutions necessary to deliver next-generation AI compute."