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Morgan Stanley Keeps Overweight Rating on Synopsys, PT Down to $510.
ByAinvest
Thursday, Sep 11, 2025 9:04 am ET1min read
Morgan Stanley Keeps Overweight Rating on Synopsys, PT Down to $510.
September 10, 2025In a recent update, Morgan Stanley has maintained its overweight rating on Synopsys Inc. (NASDAQ:SNPS) while adjusting its price target (PT) down to $510 [1]. The decision comes on the heels of Synopsys' strategic overview at the Goldman Sachs Communicopia + Technology Conference 2025, where CEO Sassine Ghazi highlighted the company's challenges and opportunities.
At the conference, Ghazi emphasized the impact of regulatory restrictions and foundry customer issues on Synopsys' IP business, which has been a significant headwind for the company. The BIS restrictions in China and the underperformance of a large foundry customer contributed to a muted growth outlook for the IP business in FY2026. However, Synopsys aims to return to mid-teens growth by 2027, with a focus on pivoting from discrete IP delivery to customized subsystems.
Morgan Stanley's analysts noted that while the IP business faces headwinds, other segments such as EDA and the recently acquired Ansys are expected to drive growth. The integration of Ansys' physics simulation into Synopsys' design platform is planned for the first half of 2026, which could bring significant synergies.
The firm also acknowledged Synopsys' strategic focus on AI initiatives, including developments in reinforcement learning, generative AI, and Agentic AI. These AI initiatives are expected to enhance Synopsys' offerings and drive long-term growth.
Despite the challenges, Morgan Stanley remains optimistic about Synopsys' ability to navigate through the current market conditions. The company's strong performance in other segments and its strategic focus on AI and integration with Ansys provide a solid foundation for future growth.
In conclusion, while Synopsys faces headwinds in its IP business, the company's strategic initiatives and strong performance in other segments offer a promising outlook. Investors should closely monitor the integration progress of the Ansys acquisition and Synopsys' AI developments for further insights.
[1]: https://in.investing.com/news/transcripts/synopsys-at-goldman-sachs-conference-strategic-focus-amid-challenges-93CH-5001390
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