Synopsys (SNPS) shares ended the last trading session 3.6% higher at $569.1. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 14.6% gain over the past four weeks.The optimism surrounding the stock is largely due to strong momentum in AI and HPC is fueling growth across Synopsys’ product segments. Synopsys.ai, VSO.ai, and ASO.ai are gaining adoption due to productivity improvements.This maker of software used to test ...

Core Viewpoint - Synopsys is expected to report strong fiscal second-quarter results driven by robust demand in AI and high-performance computing, despite some macroeconomic challenges impacting corporate budgets and currency exchange rates [3][7]. Financial Expectations - Non-GAAP earnings per share are anticipated to be between $3.37 and $3.42, with the Zacks Consensus Estimate at $3.39, indicating a 13% year-over-year increase [1]. - Revenue projections for the fiscal second quarter are between $1.585 billion and $1.615 billion, with the Zacks Consensus Estimate at $1.60 billion, reflecting a 10.10% increase from the previous year [2]. Growth Drivers - The performance is likely to benefit from strong demand in AI and high-performance computing markets, along with the momentum from Synopsys' expanded hardware-assisted verification (HAV) portfolio [3]. - The launch of next-generation HAPS 200 and ZeBu 200 systems, which offer up to 2x better performance, has reinforced Synopsys' leadership in HAV, with major customers like AMD, ARM, NVIDIA, and SiFive adopting these technologies [4]. - Advancements in agent AI are expected to enhance productivity across the industry, with continued adoption of Synopsys.ai driving significant growth [5]. - Development of IP for the global foundry ecosystem, particularly in security and encryption solutions, is also anticipated to positively impact results [6]. Challenges - Ongoing macroeconomic challenges and tightening corporate budgets are expected to partially offset the positive impacts of growth drivers [7]. Earnings Prediction Model - The current model does not predict a definitive earnings beat for Synopsys, as it holds a Zacks Rank 3 and an Earnings ESP of 0.00% [8].