Hedge funds cut NFLX, keep big bets on MSFT, AMZN, add NVDA
SUNNYVALE, Calif. - Synopsys (NASDAQ:SNPS), an $88.6 billion market cap technology leader with impressive gross profit margins of 81%, has completed its acquisition of Ansys, the company announced Thursday, creating what it describes as a leader in engineering solutions from silicon to systems.
The transaction, which was first announced on January 16, 2024, combines Synopsys’ expertise in silicon design and intellectual property with Ansys’ simulation and analysis capabilities. According to a company press release, the combined entity is now positioned to compete in an expanded $31 billion total addressable market. InvestingPro analysis shows Synopsys maintains strong financial health with robust liquidity, as evidenced by a current ratio of 7.02.
Former Ansys president, CEO, and board member Ajei Gopal and former Ansys board member Ravi Vijayaraghavan have joined Synopsys’ board of directors, effective immediately.
"The increasing complexity of developing intelligent systems demands design solutions with a deeper integration of electronics and physics, enhanced by AI," said Sassine Ghazi, president and CEO of Synopsys.
The company plans to deliver its first set of integrated capabilities in the first half of 2026, focusing on fusing multiphysics across the electronic design automation stack, including for multi-die advanced packaging. The roadmap also includes solutions for testing and virtualizing complex systems for automotive and other industries. With projected revenue growth of 11% for fiscal year 2025, the company appears well-positioned to execute on these plans.
Synopsys expects the acquisition to expand profit margins and generate greater unlevered free cash flow, enabling rapid debt reduction over two years. Following the completion of the transaction, Ansys common stock will no longer be listed on the NASDAQ stock market. For detailed analysis of Synopsys’ valuation and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro, which currently indicates the stock is trading above its Fair Value.
The combined company aims to serve customers across multiple industries including semiconductors, high-tech, automotive, aerospace, and industrial sectors, according to the statement.
In other recent news, Synopsys has received conditional approval from China’s State Administration for Market Regulation for its acquisition of Ansys, with the deal expected to close soon. This approval includes conditions that Synopsys must adhere to regarding customer contracts in China. Needham has raised its price target for Synopsys to $660, maintaining a Buy rating, and projects that the acquisition will positively impact Synopsys’ earnings per share by fiscal year 2026. Goldman Sachs has also initiated coverage of Synopsys with a Buy rating and a $620 price target, citing the company’s critical role in semiconductor design software tools. In another development, the U.S. Department of Commerce has lifted export restrictions on Synopsys products to China, allowing the company to resume normal operations in that market. Additionally, The Trade Desk will join the S&P 500 index, replacing Ansys, following the completion of Synopsys’ acquisition. This inclusion is seen as a significant milestone for The Trade Desk, enhancing its visibility and liquidity. These recent developments highlight Synopsys’ strategic moves and potential growth in the semiconductor industry.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.