Synopsys shares jump as 2027 outlook, OpenAI and AWS deals lift growth view
Synopsys is outlining a stronger long-term growth path as demand for advanced chip-design tools rises with heavier investment in artificial intelligence. The company is projecting fiscal 2027 revenue and profit above Wall Street estimates, while also adding new agreements with OpenAI and Amazon Web Services.
Highlights
- Synopsys set fiscal 2027 revenue guidance at $11.10 billion to $11.20 billion and EPS at $19.04 to $19.12, both above analyst consensus.
- Synopsys announced a revenue-sharing AI agreement with OpenAI and a multi-year AWS licensing deal worth over $1 billion, plus a planned $1 billion share buyback.
- Synopsys shares rose 10% after targeting 15% compound annual revenue growth from 2026 to 2030 and about 50% adjusted operating margin by 2030.
Investor day targets and new commercial agreements
As reported by Reuters, Synopsys set fiscal 2027 revenue at $11.10 billion to $11.20 billion for the year ending Oct. 31, 2027, above the $10.81 billion average analyst estimate compiled by LSEG. The company also forecast fiscal 2027 earnings per share of $19.04 to $19.12, ahead of the $17.81 consensus estimate.At its investor day in New York on Wednesday, the chip-design software maker also said it plans to buy back about $1 billion of shares over the coming months. Synopsys signed a revenue-sharing agreement with OpenAI on Wednesday to develop an AI model for the chip business, while Amazon.com AWS signed a multi-year deal worth more than $1 billion to license chip-design intellectual property from Synopsys.
Market reaction and longer-term growth expectations
Shares of Synopsys jumped 10% on Thursday as the company presented a long-term outlook that points to sustained demand for its products as chip designs become more complex. Synopsys is targeting about 15% compound annual revenue growth from fiscal 2026 through fiscal 2030, along with an adjusted operating margin of about 50% by fiscal 2030.Berenberg said in a note to clients that the Synopsys 2026 Investor Day delivered significantly more than the market expected. Of the 24 analysts covering the company, 22 rate the stock buy or higher, while two have hold ratings, according to LSEG data.
Our earlier coverage of Temasek’s AI investment stance explained why the Singapore state investor remains comfortable with hyperscalers’ heavy AI spending despite higher interest rates and market scrutiny. It outlined Temasek’s plan to lift AI ecosystem exposure to as much as 15% of its portfolio and noted expectations that AI-driven capex could exceed $1 trillion by 2027, underscoring the scale of demand behind AI chips, data centers, and related technologies.
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