Key Highlights
- Piper Sandler has elevated Synopsys (SNPS) from Neutral to Overweight, pushing the price target from $450 to $550
- The rating boost stems from strengthening optimism surrounding Intel’s advanced 18A-P and 14A process technologies
- Industry sources indicate both Apple and Google are engaging Intel’s foundry services, potentially increasing Synopsys IP demand
- The firm increased its fiscal 2027 earnings per share projection to $17.04 and revenue outlook to $10.8 billion
- The company maintains a Zacks Rank #2 (Buy), with consensus EPS forecasts rising 3.7% in the last month to $14.75
Piper Sandler elevated its stance on Synopsys to Overweight this Monday, simultaneously increasing the price objective to $550 from the previous $450 mark. This revised target suggests approximately 18% potential upside based on the stock’s current trading level of $464.58.
The rating enhancement focuses primarily on the accelerating momentum within Intel’s foundry operations. According to Piper analyst Clarke Jeffries, market perception regarding Intel’s 18A-P node and the upcoming 14A manufacturing technology has strengthened considerably in recent quarters. As a provider of critical design software and intellectual property for cutting-edge semiconductor development, Synopsys stands to gain substantially 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 chip designs. Additionally, Google has allegedly chosen Intel to handle approximately half of its Tensor Processing Unit manufacturing requirements extending through 2028.
Should these initiatives proceed as planned, Piper anticipates they will generate additional IP licensing opportunities and design engagement — positioning Synopsys favorably to capture this emerging demand.
Intel’s Foundry Business 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. Organizations seeking alternatives to heavily booked fabrication facilities now find Intel’s offerings increasingly attractive.
This shift could stimulate broader semiconductor design activities and generate additional business for Synopsys throughout its intellectual property and electronic design automation product lines.
Regarding financial projections, Piper elevated its fiscal 2027 revenue expectation to $10.8 billion from $10.7 billion. The firm’s fiscal 2027 earnings per share forecast increased to $17.04 from $16.69.
The firm acknowledged several potential headwinds. The upgrade’s success depends substantially on the actual scale of customer engagements with Intel’s foundry division. Since Intel’s 14A technology remains in development phases, near-term growth relies predominantly on 18A-P adoption. Piper also identified intensifying competition in the EDA sector, possible reductions in semiconductor research and development expenditures, and international trade limitations as factors requiring monitoring.
Analyst Community Shows Strong Support
Synopsys presently carries an average brokerage rating of 1.77 on a 5-point scale, placing it between Strong Buy and Buy categories. Among the 22 analyst recommendations compiled, 14 rate the stock as Strong Buy while one suggests Buy — representing 63.6% and 4.6% of total recommendations, respectively.
The Zacks Consensus Estimate for the present fiscal year has advanced 3.7% during the past month, reaching $14.75 per share. This positive estimate revision secured Synopsys a Zacks Rank #2 (Buy) designation.
According to Piper’s assessment, activity related to Intel’s 18A-P node represents the more significant near-term catalyst, with broader Intel foundry adoption expected to develop progressively over time.
