On February 26, Synopsys announced its second-quarter revenue forecast to be higher than Wall Street estimates due to increasing demand for its chip-designing software. Following the news, the company's shares surged by 2.45% to $482 in after-hours trading.
Major companies like Amazon, Google, and Apple are moving towards designing their own chips, along with car manufacturers and other sectors, which is bolstering Synopsys' software demand. The company anticipates second-quarter revenue to range between $1.59 billion and $1.62 billion, slightly surpassing analysts' projection of $1.60 billion, according to LSEG data.
Adjusted for various factors, Synopsys foresees per-share earnings for the second quarter to be within $3.37 and $3.42, compared to analysts' expected $3.35.
Partnering with chip giants like Nvidia, Qualcomm, and Intel, Synopsys offers software and hardware for cutting-edge processor design.
CEO Sassine Ghazi mentioned that while some chip sectors are down, there is robust demand for AI chip design. The trend toward designing chips for inference tasks, like AI model applications, is on the rise, benefiting Synopsys.
Regarding the pending acquisition of engineering software company Ansys for $35 billion, Ghazi reported ongoing discussions with Chinese regulators. He conveyed confidence in the process, aiming for a closure in the first half of 2025.