Loop Capital Remains Bullish on Synopsys Inc. (SNPS) on AI and EDA Tailwinds

Core Viewpoint - Synopsys Inc. is considered a strong investment opportunity by hedge funds, with a recent price target increase indicating significant upside potential [1][2]. Company Overview - Synopsys Inc. is an American electronic design automation (EDA) company specializing in the design and verification of silicon chips, electronic system-level design, and reusable components [4]. Investment Potential - Analyst Gary Mobley has reiterated a Buy rating on Synopsys, raising the price target from $570 to $600, suggesting a 28% upside [1]. - Despite a 2%-3% return over the past year, the stock is expected to benefit from a broad-based market rally anticipated in 2026, driven by growth in automotive and industrial semiconductors [2]. - The recent strategic partnership with Nvidia, which included a $2 billion stock purchase, has improved sentiment towards Synopsys [2]. Market Dynamics - The Electronic Design Automation (EDA) market is entering a new growth phase, particularly with the introduction of AI-enhanced EDA tools, which are expected to lead to higher annual contract values upon license renewal [3]. - Current challenges in the semiconductor industry, including China export controls, have temporarily obscured the long-term growth potential of the EDA sector, although Synopsys's exposure to China is relatively minor [3].