Synopsys (SNPS) stock rose 12.8% on Thursday, October 1, 2026, outpacing the S&P 500's 0.2% gain for the day. The surge followed new long-term growth targets announced at the company's Investor Day on September 30, 2026, rather than a quarterly earnings report, which had already taken place on August 26.
News reports dated October 1 indicated the stock rose after Synopsys provided fiscal 2027 guidance that exceeded estimates. The company set a fiscal 2027 revenue target of up to $11.2 billion. This figure is a forecast for future sales, not a reported result. The top of this target is approximately 15% higher than the top of Synopsys's fiscal 2026 revenue range, which management guided to between $9.69 billion and $9.74 billion during its August 26 earnings call.
| Metric | Value |
|---|---|
| Fiscal 2027 Revenue Target (Top) | $11.2 billion |
| Fiscal 2026 Revenue Guidance (Top) | $9.74 billion |
| Fiscal Q3 2026 Revenue Growth (YoY) | ~42% |
| Fiscal Q3 2026 EDA Revenue Growth (YoY) | 8.5% |
Recent revenue growth has accelerated, but it includes the impact of an acquisition. Synopsys revenue rose about 42% in fiscal Q3 2026 from a year earlier. That total included approximately $711 million from Ansys, the simulation business Synopsys acquired a year prior. Revenue from Electronic Design Automation (EDA) software, used for chip design, grew by 8.5% in the same period. Because fiscal 2026 already includes a full year of Ansys revenue, Synopsys must grow its combined business by roughly 15% to reach the upper end of its fiscal 2027 target.
The Investor Day also featured two significant commercial announcements. Amazon’s cloud unit agreed to license chip design intellectual property from Synopsys in a multi-year deal valued at more than $1 billion. Additionally, Synopsys announced a partnership with OpenAI to develop an AI model for chip design. The stock had already risen 4.8% on September 30, the day these deals and targets were announced, before the larger move occurred on October 1.
While revenue targets have risen, operating profit has not kept pace with sales. Synopsys maintained an operating margin of 11.0% over the last twelve months, a figure that remained unchanged by the recent stock price increase. This margin represents actual operating profit relative to sales and is distinct from the adjusted non-GAAP margins cited in the company's new targets. The operating margin has declined for two consecutive years, dropping from 17.2% a year earlier and 25% two years prior.
The decline coincided with the Ansys acquisition and restructuring charges mentioned by management on the August 26 call, though the specific contribution of each factor to the margin drop is not quantified in available reports. Synopsys stock currently trades at 87.3 times its trailing twelve-month earnings, compared to a multiple of 21.4 for the S&P 500. The company's next quarterly report for fiscal Q4 2026 will provide further data on whether operating profit is beginning to follow revenue growth.