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    Synopsys (SNPS) Is Up 5.8% After AI IP Strategy Faces Securities Suits And Guidance Update

    Simply Wall St·12/23/2025 00:38:46
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    • In December 2025, Synopsys reported past fourth-quarter 2025 results showing revenue rising to US$2,254.86 million while net income fell to US$448.7 million, and issued guidance for fiscal 2026 calling for US$9.56–9.66 billion in revenue and GAAP EPS of US$2.49–2.90.
    • A series of securities fraud class action lawsuits now allege Synopsys misled investors about how its AI-focused strategy affects the economics of its Design IP business, putting its AI growth narrative under legal scrutiny.
    • We’ll now examine how the new securities fraud class actions around Synopsys’ AI-focused IP strategy may alter its long-term investment narrative.

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    Synopsys Investment Narrative Recap

    To own Synopsys, you need to believe that its EDA and IP franchise can compound value as chip and system complexity rises, while the Ansys deal and AI-focused roadmap deepen its role in advanced design. The new securities fraud class actions around AI-driven Design IP economics put a spotlight on how sustainable that pivot really is, but do not yet alter the central short term catalyst of integrating Ansys or the key risk around IP profitability and execution.

    The most relevant recent update is Synopsys’ fiscal 2026 guidance, calling for US$9.56–9.66 billion in revenue and GAAP EPS of US$2.49–2.90, issued alongside Q4 2025 results. That outlook now sits against allegations that AI centric roadmap and resource decisions have weighed on Design IP economics, which could influence how investors weigh the IP transition catalyst against the risk of structurally higher costs and weaker margins.

    Yet investors should be aware that the legal challenges to Synopsys’ AI pivot could compound existing concerns about its IP segment’s profitability and...

    Read the full narrative on Synopsys (it's free!)

    Synopsys' narrative projects $12.1 billion revenue and $2.7 billion earnings by 2028.

    Uncover how Synopsys' forecasts yield a $556.73 fair value, a 16% upside to its current price.

    Exploring Other Perspectives

    SNPS 1-Year Stock Price Chart
    SNPS 1-Year Stock Price Chart

    Six fair value estimates from the Simply Wall St Community span roughly US$451 to US$557 per share, reflecting a wide range of individual expectations. Against that backdrop, questions around whether Synopsys’ AI focused IP transition can support margins over time give you a concrete issue to test those views against.

    Explore 6 other fair value estimates on Synopsys - why the stock might be worth as much as 16% more than the current price!

    Build Your Own Synopsys Narrative

    Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.