Synopsys SNPS has achieved another significant milestone by successfully demonstrating compatibility between its Peripheral Component Interconnect Express 6.0 Intellectual Property (PCIe 6.0 IP) and Intel INTC test chip for PCIe 6.0, operating at a speed of 64 GT/s. This might boost the company’s Design IP segment, which accounts for 25% of its business.
The Synopsys PCIe 6.0 IP reduces latency while enabling real-time data connectivity. The advancement will minimize design risks and speed up the product development timeline for those integrating the PCIe 6.0 from Intel or Synopsys. Additionally, these products will seamlessly integrate and effectively communicate within its ecosystem.
SNPS has been focusing on enhancing its capabilities by introducing new products. Earlier this month, the company introduced Synopsys.da, with an aim to help chipmakers optimize power, performance and area by providing valuable insights. It is an extension of Synopsys’ existing Electronic Design Automation (EDA) Solution, known as Synopsis.ai.
Synopsys, Inc. Price and Consensus
Synopsys’ Prospects Shine for Its Robust Product Lineup
Synopsys’ business segments consists of Design Automation, which accounts for approximately 67.5% of its third-quarter fiscal 2023 revenues, Software Integrity, which makes up nearly 9%, and Design IP contributing the remaining 23.5%.
The Design Automation segment has experienced remarkable growth, reaching $1 billion of revenues in the third quarter of 2023. This growth can be attributed to Fusion Compiler, a key product that is gaining traction at notable manufacturing nodes, including TSMC N2, TSMC N5A, Samsung SF3 and Intel 18A.
The company has also made significant strides in the multi-die chip design vertical with its 3D IC Compiler Platform, which was used to deploy a first-of-its-kind 3D stacked heterogeneous chip design for smartphones.
In the Design IP segment, Synopsys and Intel recently entered into an agreement to utilize SNPS’ IP in Intel-3 and Intel-18A processes.
Additionally, Synopsys has provided Advanced Micro Devices AMD with EDA solutions designed for use with the latest generation AMD EPYC processors benefiting both companies’ shared customer base.
SNPS’ successful designs boost its product lineup and revenues. Consequently, the company expects its fourth-quarter fiscal 2023 revenues to come between $1.57 billion and $1.59 billion. The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $1.58 billion, indicating year-over-year growth of 23.30%.
Zacks Rank & Other Stock to Consider
Synopsis currently carries a Zacks Rank #2 (Buy), while Intel and Advanced Micro Devices each carry a Zacks Rank #3 (Hold).
Shares of SNPS have rallied 44.1% year to date compared with the Zacks Computer and Technology sector’s return of 37.7%. Shares of INTC and AMD have rallied 46.7% and 58.5% year to date, respectively.
Another top-ranked stock worth considering from the broader technology sector is NVIDIA NVDA which currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for NVIDIA’s third-quarter fiscal 2024 earnings has been revised upward by 48.2% to $3.32 per share in the past 30 days. For fiscal 2024, earnings estimates have increased by 36.3% cents to $10.67 per share in the past 30 days.
NVIDIA’s earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while missing on one occasion, the average surprise being 9.8%. Shares of NVDA have surged 200.9% YTD.
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