Synopsys, Inc. (SNPS)

Synopsys's stock price experienced a 36% drop on September 10, 2025, following a disappointing Q3 fiscal year 2025 earnings report and a weak outlook for Q4, attributed to challenges with a major foundry customer and the effects of past export restrictions in China. The stock later saw some recovery due to news of Nvidia's investment in Intel. In January 2024, Synopsys announced its intention to acquire Ansys for $35 billion, which closed on July 17, 2025, expanding its presence in simulation software and systems design.

Synopsys's revenue generally tends to be stable, but the company experiences some cyclicality in its profit margins and free cash flow. A rebound in free cash flow is typically expected in the second half of the fiscal year, linked to the timing of customer agreements and when customer projects ramp up to full production.

Synopsys's core business involves providing tools and services for the semiconductor design and manufacturing industry, including EDA software for IC design and testing, electronic system-level design and verification, and reusable components (intellectual property). The company offers tools for digital and analog circuits, simulators, and debugging environments. Key offerings include AI-driven chip design solutions like DSO.ai, a broad portfolio of semiconductor IP, logic synthesis, physical design and verification tools, and a software security and quality suite.

Synopsys has a significant global presence with offices across North America, Asia, and Europe. The United States is its largest market, contributing 44.71% of its total revenue in fiscal year 2024. Other substantial markets include China (16.15% of revenue), Korea (12.62%), and Europe (10.03%). The company also has a critical hub in India, with over 8,000 employees, and a large presence in Armenia, serving as a key research and development center.

Synopsys maintains a strong brand reputation within the technology industry and was recognized as the 12th largest software company globally in 2024. The company has also appeared on several Forbes lists in 2025, including "Most Trusted Companies in America" and "America's Best Companies." The recent stock decline due to earnings and customer-related issues could potentially affect investor confidence and public perception.

Institutional investors hold a substantial portion of Synopsys, Inc. shares, ranging from approximately 78% to 89%, with major holders including Vanguard Group Inc, BlackRock, Inc., and Capital World Investors. Individual and retail investors own about 22% to 27.58% of the company's stock, while insider ownership is less than 1%. In September 2025, CEO Sassine Ghazi and CAO Sudhindra Kankanwadi sold significant amounts of Synopsys stock.