"Synopsys's 2.39% weekly gain looks solid compared to the broader software sector, which posted just 0.33% over the same period. But semiconductors climbed 1.76% this week, and year to date, the semiconductor ETF is up 17.77% while Synopsys has bled value. The divergence is striking. Synopsys builds the tools that design the chips everyone wants, yet it's trading like a software company in a sector-wide selloff rather than a semiconductor play riding the AI wave."
"The Design IP segment is the biggest anchor weighing on Synopsys' share price over the past six months. Revenue hit $1.75 billion in fiscal 2025, down 8% year over year. CEO Sassine Ghazi laid out the challenges: "Foundry customer uptake challenges, China restrictions impact, custom IP delivery delays." The company expects "muted growth in the low-to-mid single digit range" for fiscal 2026, calling it a "transitional year." China revenue dropped 18% in fiscal 2025, with no improvement expected near term."
Synopsys shares rose 2.39% over the past five trading days, moving from $426.88 to $437.09, while year-to-date performance is down 6.95% and down 13.51% over the past month. The company outpaced the broader software sector's 0.33% weekly gain but lagged the semiconductor sector, which climbed 1.76% and is up 17.77% year to date. The Design IP segment weakened, with fiscal 2025 revenue of $1.75 billion, down 8% year over year, and China revenue fell 18%. Management projects muted low-to-mid single-digit growth for fiscal 2026 and calls it a transitional year. NVIDIA invested $2 billion at $414.79 per share to form a strategic collaboration.
Read at 24/7 Wall St.
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