{
  "@context": "https://frontierpicks.com/schemas/dossier.v1.json",
  "ticker": "SNPS",
  "name": "Synopsys, Inc.",
  "url": "https://frontierpicks.com/dossiers/SNPS/",
  "json_url": "https://frontierpicks.com/dossiers/SNPS.json",
  "status": "DORMANT",
  "current_conviction": "LOW",
  "archetype": {
    "code": "a2",
    "n": 2
  },
  "current_thesis": "Synopsys' AI chip-design growth plan and fiscal 2027 revenue guide of $11.1–11.2 billion still stand, and the shares have recovered to $466.97. The fourth-quarter report on 8 December 2026 decides whether the guide holds.",
  "invalidation_trigger": "A daily close above $534.56, the highest close of the last 126 sessions (2026-05-26), would show the shares leading the S&P 500 and prove this call wrong.",
  "catalyst_date": "2026-12-08",
  "portfolio": null,
  "pick": null,
  "themes": [
    "ai-enterprise-software",
    "ai-chips-memory"
  ],
  "tags": [],
  "sources": [],
  "caveats": [],
  "source_links": [
    {
      "title": "Synopsys Announces Earnings Release Date For Fourth Quarter and Fiscal Year 2026",
      "url": "https://investingnews.com/synopsys-announces-earnings-release-date-for-fourth-quarter-and-fiscal-year-2026/",
      "date": null
    },
    {
      "title": "Synopsys targeted by Elliott in bid to boost software and services monetization",
      "url": "https://finance.yahoo.com/markets/stocks/articles/elliott-investment-management-takes-multibillion-130200232.html",
      "date": null
    },
    {
      "title": "Synopsys Details Growth Strategy and Long-term Financial Model at 2026 Investor Day",
      "url": "https://www.benzinga.com/node/62092856",
      "date": null
    }
  ],
  "evidence": [
    {
      "claim": "Synopsys will report fourth-quarter and fiscal 2026 results on 2026-12-08 after market close, with a call at 5:00 p.m. Eastern.",
      "source": "Synopsys press release via PR Newswire, 2026-11-05",
      "as_of": "2026-11-05"
    },
    {
      "claim": "Synopsys guided fiscal 2027 revenue to $11.1–11.2B and adjusted EPS to $19.04–19.12, against consensus of $10.73B and $17.32.",
      "source": "Synopsys investor day release; Benzinga 2026-09-30",
      "as_of": "2026-09-30"
    },
    {
      "claim": "The fourth-quarter fiscal 2026 guide is $2.53–2.58B in revenue and $4.10–4.16 in non-GAAP EPS.",
      "source": "Q3 FY2026 earnings release (8-K exhibit 99.1)",
      "as_of": "2026-08-26"
    },
    {
      "claim": "Rothschild & Co Redburn raised its Synopsys price target to $615 from $550.",
      "source": "Company news 2026-11-04",
      "as_of": "2026-11-04"
    },
    {
      "claim": "Cadence reported Q3 2026 revenue of $1.633B, up 22% year over year, and raised its 2026 outlook to 21% revenue growth.",
      "source": "Cadence Q3 2026 8-K exhibit 99.1",
      "as_of": "2026-10-26"
    },
    {
      "claim": "Synopsys began a $1B accelerated share repurchase with JPMorgan, receiving about 1,735,000 shares initially, with final settlement by 2027-01-05.",
      "source": "Synopsys press release 2026-10-05",
      "as_of": "2026-10-05"
    },
    {
      "claim": "Deputy CFO Sudhindra Kankanwadi sold 3,000 shares at $484.78 on 2026-10-05 and 9,170 shares at $500.00 on 2026-10-06; the filing does not mark a 10b5-1 plan.",
      "source": "SEC Form 4, Synopsys",
      "as_of": "2026-10-06"
    },
    {
      "claim": "Elliott Investment Management took a multibillion-dollar stake in Synopsys, first reported in March 2026; a stake-disclosure headline appeared 2026-11-03.",
      "source": "Wall Street Journal via Yahoo Finance, March 2026; company news 2026-11-03",
      "as_of": "2026-11-03"
    }
  ],
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        "pretax_income": {
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        "diluted_share_change": {
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  "body_markdown": "## Current Thesis\n\nSynopsys' business case is intact and the price has recovered part of October's drop, but the fourth-quarter report on 2026-12-08 decides whether the fiscal 2027 revenue guide of $11.1–11.2 billion holds. The shares closed at $466.97 on 2026-11-09, 12.6% below the 52-week high of $534.56 and 10.5% above the 2026-10-22 low close of $422.48.\n\nSynopsys announced on 2026-11-05 that it will report fourth-quarter and fiscal 2026 results on Tuesday 2026-12-08 after the market close, with a call at 5:00 p.m. Eastern. The quarter, which ended 2026-10-31, was guided at $2.53–2.58 billion in revenue and $4.10–4.16 in non-GAAP earnings per share (EPS).\n\nThe story is well known: the guide has been public since the 2026-09-30 investor day, and news since then is mostly follow-on items. Those include Rothschild & Co Redburn raising its target to $615 from $550 on 2026-11-04 and a company news headline on 2026-11-03 that Elliott Investment Management disclosed a stake. The Wall Street Journal first reported Elliott's multibillion-dollar position in March 2026.\n\n## Bull Case\n- **Guidance cleared consensus by a wide margin.** On 2026-09-30 Synopsys guided fiscal 2027 revenue to $11.1–11.2 billion against a $10.73 billion consensus. It guided adjusted EPS to $19.04–19.12 against $17.32, according to Benzinga.\n- **Amazon contract adds royalty income.** The Amazon deal announced 2026-09-30 is worth more than $1 billion over several years. It covers the Nitro, Graviton and Trainium chips under a license-plus-royalty model.\n- **The closest peer beat and raised.** Cadence reported third-quarter 2026 revenue of $1.633 billion on 2026-10-26, up 22% year over year, and raised its 2026 outlook to 21% growth. Synopsys shares closed at $474.42 on 2026-10-27, up 4.4% on the session.\n- **An activist is on the register.** The Wall Street Journal reported in March 2026 that Elliott holds a multibillion-dollar stake and wants Synopsys to earn more from its software and services. Company news on 2026-11-03 carried a headline that Elliott disclosed a stake.\n- **Analyst targets sit above the price.** Redburn's target is $615 (2026-11-04). Morgan Stanley's is $574 (2026-10-20), Needham's $620 (2026-10-12), Rosenblatt's $620, KeyBanc's $605, Wells Fargo's $540 and HSBC's $700.\n- **Buyback and credit support.** A $1 billion accelerated share repurchase with JPMorgan began 2026-10-05, with final settlement due by 2027-01-05. S&P Global Ratings raised Synopsys to BBB+ from BBB on 2026-10-26.\n\n## Bear Case\n\n- **The October price break has not been recovered.** The shares closed at $454.63 on 2026-10-16 and at $422.48 on 2026-10-22. The 2026-11-09 close of $466.97 is still below the early-October highs, when an insider sold at $500.00.\n- **An executive sold into the rally.** Deputy chief financial officer Sudhindra Kankanwadi sold 3,000 shares at $484.78 on 2026-10-05 and 9,170 shares at $500.00 on 2026-10-06 after exercising options. The SEC Form 4 does not mark a Rule 10b5-1 plan.\n- **The guide is only weeks old.** A fiscal 2027 range set on 2026-09-30 and cut on 2026-12-08 would damage the case. Consensus at the time was $10.73 billion, so the guide sits well above what the market expected.\n- **Leverage policy loosened.** S&P noted on 2026-10-26 that management dropped its target of net leverage below 1x and plans to put as much as 50% of cash flow into buybacks.\n- **China exposure is back in the story.** Nikkei Asia reported on 2026-10-08 that Synopsys wants to work with Chinese AI labs on chip design. US export rules restricted chip-design software sales to China in May 2025.\n- **GAAP and adjusted earnings differ widely.** Amortization from the 2025 Ansys acquisition and stock compensation account for most of the gap.\n\n## Setup & Price Structure\nThe last close was $466.97 on 2026-11-09, and the 14-day relative strength index (RSI) was 55.5. Benzinga flagged RSI readings above 70 on 2026-10-07; momentum has cooled since. The shares are up 13.3% over three months, mostly from the 10.8% jump on 2026-10-01.\n\nLevels that matter are the $474.42 close on 2026-10-27, the $500.00 insider sale price on 2026-10-06, the 52-week high of $534.56 and the 2026-10-22 low close of $422.48. Crowding evidence is the imminent earnings date, the open-market insider sales in October and a disclosed activist holder. Retail attention is not measured here. The accelerated repurchase ends by 2027-01-05, so share retirement continues through the report.\n\n## Catalyst Calendar\n\n- **2026-12-08:** Q4 and full-year fiscal 2026 results after market close; call at 5:00 p.m. Eastern. Shows whether revenue lands in the $2.53–2.58B guide, whether the $11.1–11.2B fiscal 2027 range holds and whether Amazon royalty revenue appears.\n- **2026-12-09:** First trading session after the fourth-quarter report. Sets the price reaction to the guide and to any update on buybacks or the Elliott holding.\n\n## What Would Change Our Mind\n\nA daily close above $534.56, the highest close of the last 126 sessions (2026-05-26), would show the shares leading the S&P 500 and prove this call wrong.\n\n## Correlation Notes\nSynopsys trades with Cadence, its direct peer. The two rose and fell together around Cadence's 2026-10-26 report. Both also respond to chip-stock sentiment and to the 10-year Treasury yield, which was 5.25% on 2026-10-01 per Benzinga. Ansys, acquired in July 2025, ties part of Synopsys' revenue to industrial simulation spending, so cyclical industrial demand matters alongside AI chip design.",
  "first_seen": "2026-11-10",
  "last_analyzed": "2026-11-10T12:33:31+00:00",
  "last_synthesized": "2026-11-10",
  "date_modified": "2026-11-10",
  "license": "Content © FrontierPicks. Cite the canonical URL."
}