Synopsys Shares Gain Momentum Ahead of Earnings Release

Wall Street sentiment toward Synopsys Inc. has notably improved just before the company’s scheduled quarterly earnings announcement. This shift follows a volatile period for the semiconductor design software leader, marked throughout 2025 by concerns over its business in China and spending cuts from major customers.

A primary catalyst for the renewed confidence is a strategic investment from NVIDIA Corporation. In early December, NVIDIA disclosed a $2 billion stake in Synopsys. Market analysts view this move as a significant vote of confidence that mitigates downside risk and solidifies a long-term partnership in advanced chip design. The investment is perceived as a stronger driver for the stock's trajectory than ongoing legal challenges the company faces.

Analysts Revise Ratings Upward

Reflecting this improved outlook, two major financial institutions have upgraded their stance on Synopsys. Both Bank of America and Citi have raised their ratings to "Neutral," concurrently setting a price target of $500 per share. For Bank of America, this represents a notable reversal. The institution had issued a double downgrade in September, citing budget reductions at Intel and tighter export controls affecting China. The current analysis suggests the deepened alliance with NVIDIA establishes a valuation floor that was absent during the stock's decline in the third quarter.

Should investors sell immediately? Or is it worth buying Synopsys?

Earnings and Acquisition Integration in Focus

Investor attention is now fixed on Wednesday, December 10, when Synopsys will report fourth-quarter and full-year results after the market closes. Consensus estimates point to revenue of approximately $2.25 billion. Beyond the headline numbers, the market will scrutinize management commentary on the integration of Ansys. The acquisition of the simulation specialist, finalized in July, was a substantial investment. Recent analyst notes indicate, however, that the largest uncertainties regarding integration costs are now likely reflected in the share price.

Legal Challenges Persist

The company does enter this reporting period under a legal cloud. Several class-action lawsuits allege that Synopsys leadership failed to communicate risks related to China and Intel in a timely manner. Currently, these proceedings are viewed as background noise, with the strategic NVIDIA investment dominating the narrative.

The Path Forward

The upcoming analyst call will set the tone for the coming months. Key points will be the financial guidance for fiscal year 2026 and the development roadmap for joint AI design tools with NVIDIA. Should Synopsys deliver a convincing outlook, the recent share price recovery—a gain of over 15% in the past 30 days—could solidify into a sustained positive trend.