Nvidia ( NVDA ) is sure to come up in any discussion of the best artificial intelligence stocks to watch. But don’t ignore. Synopsys (SNPS), a key Nvidia partner. Shares of Synopsys stock are poised to enter a new buy zone, after hitting a 2008 year-end low of 3,594 percent on the IBD Long-Term Leaders list.
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Synopsys also joins Nvidia stocks on the IBD 50, IBD Big Cap 20 and IBD Breakout Stocks Index. Both AI leaders have the highest possible 99 composite rating.
Like Nvidia, strong demand for all things AI has driven strong institutional demand for Synopsys. In addition to the solid B accumulation/distribution rating, 52 funds with an A+ rating from IBD own shares of Synopsys stock.
Although it didn’t join Nvidia on the list of the 100 best stocks for 2023, Synopsys rallied 65% last year. And even though Nvidia has moved past the buy limit, Synopsys continues to set a new potential breakout.
See who joins Synopsys and Nvidia on the IBD Breakout Stock Index.
AI Megatrends drives Synopsys to acquire Ansys.
Sunnyvale, Calif. Based in, Synopsys provides software and systems designed to simulate and verify semiconductor designs and prototypes. It provides software for self-driving cars and machines that learn, as well as the communication and data transfer necessary to enable cloud-based apps.
In addition to Nvidia, Synopsys works with key players in the semiconductor industry, including Taiwan Semiconductor (TSM), Arm Holdings (ARM), Intel (INTC), Samsung and more.
Earlier this month, Synopsys announced that it would acquire Ances (ANSS), which develops engineering simulation software applications for design analysis and prototype evaluation.
The agreement aims to address the megatrends of AI, the proliferation of silicon and increasingly complex software-defined systems. Synopsys valued the buyout at approximately $35 billion, based on the closing price of Synopsys common stock on Dec. 21.
Synopsys Stock Etches Handle As Nvidia Hits A Record High
With its relative strength streak rising, Nvidia stock has cleared the 600 mark as its all-time high.
Meanwhile, Synopsys Stock has developed a second-stage cup with a handle. The buy point is 554.57.
Forming the right side of this month’s base, note how the stock posted several days of heavy volume. Such action indicates demand.
Synopsys faces its next earnings test on February 21.
The stock hit record highs on Nov. 29 after its fiscal fourth quarter beat estimates. Marking the fastest growth in the second quarter, Synopsys posted earnings per share of $3.17, up 66 percent from the year-ago quarter. Revenue rose 25 percent to just under $1.6 billion. This marked the third quarter of acceleration.
For the current quarter, Synopsys stock analysts forecast revenue growth of 39% which would result in 83% growth for the full year.
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