Key Takeaways
- Piper Sandler elevated Synopsys (SNPS) from Neutral to Overweight, boosting the price target from $450 to $550
- Growing optimism surrounding Intel’s 18A-P and 14A process technologies fuels the bullish outlook
- Apple and Google have reportedly engaged Intel’s foundry services, potentially increasing Synopsys IP demand
- The firm increased its fiscal 2027 revenue projection to $10.8 billion and EPS forecast to $17.04
- Synopsys maintains a Zacks Rank #2 (Buy), with consensus EPS projections rising 3.7% to $14.75 in the last month
On Monday, Piper Sandler elevated its stance on Synopsys to Overweight while increasing the price objective to $550 from the previous $450. This updated target represents approximately 18% potential appreciation from the stock’s latest trading level of $464.58.
The rating enhancement focuses on accelerating momentum within Intel’s foundry operations. According to Piper analyst Clarke Jeffries, market perception regarding Intel’s 18A-P and upcoming 14A process nodes has strengthened considerably in recent quarters. Given that Synopsys provides critical design software and intellectual property for cutting-edge semiconductor development, increased foundry utilization typically translates to direct business gains.
The narrative becomes particularly compelling considering the reported clientele engaging Intel’s manufacturing facilities. Industry sources suggest Apple may leverage Intel’s production capabilities for select upcoming processors. Meanwhile, Google has allegedly committed roughly half its TPU manufacturing volume to Intel through 2028.
Should these partnerships materialize as anticipated, Piper forecasts substantial growth in IP licensing agreements and design engagementāareas where Synopsys maintains strong competitive positioning.
Intel’s Foundry Business as Growth Driver
Piper also highlighted that capacity limitations at premier foundry facilities have elevated the strategic importance of Intel’s developing manufacturing capabilities. Customers seeking alternatives to oversubscribed fabrication plants now view Intel as a more viable option.
This shift could stimulate expanded semiconductor design projects and generate additional opportunities for Synopsys throughout its IP portfolio and EDA tool offerings.
Regarding financial projections, Piper elevated its fiscal 2027 revenue estimate to $10.8 billion from $10.7 billion. The firm’s fiscal 2027 earnings per share forecast advanced to $17.04 from $16.69.
The analyst did acknowledge potential headwinds. The optimistic outlook relies significantly on the actual scale of customer engagements with Intel’s foundry division. Since Intel’s 14A technology remains in development stages, immediate momentum depends primarily on 18A-P adoption. Piper also noted intensifying competition in EDA markets, possible deceleration in semiconductor research spending, and international trade barriers as factors requiring monitoring.
Analyst Community Remains Positive
Synopsys presently carries an average brokerage rating of 1.77 on a scale of 5, positioning it between Strong Buy and Buy territory. Among the 22 analyst opinions compiled, 14 rate it Strong Buy while one recommends Buyārepresenting 63.6% and 4.6% of total ratings, respectively.
The Zacks Consensus Estimate for the ongoing fiscal year has advanced 3.7% during the past month to $14.75 per share. This upward revision pattern contributed to Synopsys receiving a Zacks Rank #2 (Buy).
According to the firm, activity related to Intel’s 18A-P node represents the more significant near-term catalyst, while broader Intel foundry adoption is anticipated to develop progressively over time.
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