Key Highlights
- Piper Sandler elevated Synopsys (SNPS) from Neutral to Overweight, boosting the price target from $450 to $550
- Rising optimism surrounding Intel’s 18A-P and 14A process nodes fuels the bullish outlook
- Industry sources indicate Apple and Google are engaging Intel’s foundry services, potentially expanding Synopsys IP demand
- The firm increased its FY2027 revenue projection to $10.8 billion and EPS forecast to $17.04
- Synopsys maintains a Zacks Rank #2 (Buy), with consensus EPS estimates rising 3.7% in the last month to $14.75
Piper Sandler issued an Overweight rating for Synopsys this Monday, pushing the price target upward to $550 from the previous $450. This revised target represents approximately 18% potential appreciation from the stock’s recent trading level of $464.58.
The rating improvement hinges on accelerating momentum within Intel’s foundry operations. According to Piper analyst Clarke Jeffries, market perception regarding Intel’s 18A-P technology and the forthcoming 14A manufacturing platforms has strengthened considerably in recent quarters. As a leading provider of design software and intellectual property for cutting-edge semiconductor development, Synopsys typically gains when foundry utilization increases.
The narrative becomes particularly compelling when examining the reported client roster for Intel’s fabrication facilities. Industry reports suggest Apple may leverage Intel’s manufacturing capabilities for select upcoming processors. Google has allegedly committed to Intel for approximately 50% of its TPU manufacturing requirements extending through 2028.
Should these partnerships proceed as anticipated, Piper forecasts they will generate substantial IP licensing opportunities and design engagement — positioning Synopsys favorably to capitalize on this expanding demand.
Intel’s Foundry as Growth Driver
Piper’s analysis also highlighted that capacity limitations at cutting-edge semiconductor foundries have elevated the strategic importance of Intel’s developing manufacturing capabilities. Companies seeking alternatives to heavily booked fabrication facilities now view Intel as a more viable option.
This shift could stimulate broader semiconductor design activity while generating additional business for Synopsys across both its intellectual property and EDA tool portfolios.
Regarding financial projections, Piper adjusted its FY2027 revenue expectation upward to $10.8 billion from $10.7 billion. The firm’s FY2027 earnings per share estimate increased to $17.04, up from $16.69.
The analysis does acknowledge certain risk factors. The upgrade’s success depends substantially on the actual magnitude of customer engagements with Intel’s foundry operations. Since Intel’s 14A technology remains in development, near-term growth relies predominantly on 18A-P adoption. Piper additionally noted intensifying competition in the EDA sector, possible reductions in semiconductor research and development expenditures, and international trade limitations as concerns worth monitoring.
Analyst Community Remains Positive
Synopsys presently carries an average brokerage rating of 1.77 on a scale of 5, positioned between Strong Buy and Buy. Among the 22 tracked analyst opinions, 14 recommend Strong Buy while one suggests Buy — representing 63.6% and 4.6% of coverage, respectively.
The Zacks Consensus Estimate for the ongoing fiscal year has advanced 3.7% during the previous month to $14.75 per share. This upward revision pattern contributed to Synopsys receiving a Zacks Rank #2 (Buy).
According to Piper’s assessment, activity related to Intel’s 18A-P node represents the most significant near-term catalyst, with broader Intel foundry adoption expected to develop progressively over time.
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