Shares of Synopsys Inc. surged to an all-time high following the semiconductor-design-software company’s surpassing of quarterly profit projections and upward revision of its annual forecast, all while highlighting its advanced artificial-intelligence platform, Synopsys.ai.
CEO Sassine Ghazi expressed satisfaction with the company’s strong performance in the first quarter, attributing it to effective execution and the increasing significance of AI in driving customer investments for future growth.
In midday trading, Synopsys’s stock (SNPS, +6.88%) soared 10.4%, marking its most substantial single-day increase in four years and achieving its first-ever close above $600 since its IPO 32 years ago. The stock was among the top performers in the S&P 500 index on that day, with Nvidia Corp. (NVDA, +16.37%), a key player in AI chips, holding the top spot following its own positive earnings report.
The company’s fiscal first-quarter results, ending on Jan. 31, revealed a net income of \(449.1 million, or \)2.89 per share, a notable increase from the previous year’s \(271.5 million, or \)1.75 per share. Adjusted earnings per share, excluding certain one-time items, came in at \(3.56, surpassing the FactSet consensus of \)3.43. Revenue also saw a significant uptick, rising 21.1% to $1.649 billion, slightly exceeding the FactSet estimate.
Synopsys’s gross margin saw improvement, reaching 80% compared to 79.1% previously. Looking ahead to the full fiscal year, the company maintained its revenue guidance while raising its adjusted EPS outlook.
Analyst Jason Celino from KeyBanc Capital reaffirmed an overweight rating on Synopsys’s stock and set a price target of $675 post-earnings report, emphasizing the company’s long-term growth potential.
During the conference call with analysts, CEO Ghazi discussed the ongoing paradigm shift towards pervasive intelligence driven by AI and interconnected technologies. He highlighted Synopsys’s pivotal role in this transformation, leveraging its expertise in Silicon-to-Systems innovation.
Ghazi also emphasized the company’s success in securing significant design wins and displacements in the competitive landscape, attributing these victories to the comprehensive and cutting-edge electronic-design-automation platform, Synopsys.ai.
Despite a 69% increase in Synopsys’s stock value over the past year, outperforming the VanEck Semiconductor exchange-traded fund (SMH) and the S&P 500, the company continues to demonstrate strong performance and strategic positioning in the evolving tech landscape.
