Synopsys (SNPS) shares inched higher on Thursday after Wells Fargo analyst Joe Quatrochi issued a bullish note in favor of the electronic design automation (EDA) company. Quatrochi upgraded SNPS this morning to “Overweight” and raised his price target as well to $475, signaling potential upside of nearly 20% from current levels.
Wells Fargo’s bullish call brings a much-needed reprieve to Synopsys stock, which has otherwise been in a sharp downtrend. At the time of writing, it’s trading about 25% below its YTD high.
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www.barchart.comWells Fargo’s Bullish View on Synopsys Stock
In his research note, Joe Quatrochi cited accelerating demand across artificial intelligence (AI) and advanced semiconductor design automation for the upgrade.
According to Quatrochi, growing AI adoption is driving strong customer commitments, positioning SNPS shares to benefit from expanding revenue momentum into fiscal year 2027.
Crucially, the analyst sees the upcoming Analyst Day on Sept. 30 as a near-term catalyst that could unlock further shareholder value.
He expects management to outline long-term growth initiatives, strategic progress in intellectual property (IP) solutions, and integration milestones that underscore Synopsys’s key role in enabling next-gen custom silicon.
SNPS Shares Offer Favorable Risk-Reward
Wells Fargo’s bullish view on Synopsys shares is also rooted in its attractive valuation.
Following the year-to-date pullback, the company is trading at a price-to-sales (P/S) ratio of about 10x, which Quatrochi finds compelling for a fast-growing AI beneficiary.
In the latest reported quarter, SNPS posted a 42% year-on-year increase in revenue to $2.48 billion, on a better-than-expected $3.91 per share of earnings (EPS).
That said, the Nasdaq-listed firm has a history of losing about 3.55% on average in September — a seasonal pattern that makes it somewhat less attractive to own in the near term.
What’s the Consensus Rating on Synopsys Inc
Wells Fargo is not alone in seeing SNPS stock as undervalued and recommending buying it for the longer term at the current price.
The consensus rating on Synopsys currently sits at “Strong Buy,” with the mean price targets of about $551 indicating potential for a more than 35% rally through the remainder of 2026.
www.barchart.com On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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