Street Calls of the Week
Investing.com -- Synopsys (NASDAQ:SNPS) stock rose 7% Thursday morning, with the move appearing connected to Intel’s (NASDAQ:INTC) newly announced partnership with Nvidia (NASDAQ:NVDA).
The electronic design automation company’s shares climbed despite no direct news from Synopsys itself. Market participants are linking the stock’s rise to the major collaboration announced between Intel and Nvidia, which includes plans to develop custom data center and PC products.
Mizuho TMT Sector Specialist Jordan Klein noted the connection, writing that Synopsys is "up 10%+ on this news given INTC one of their biggest IP customers and SNPS materially guided lower in that business due to major cutbacks by INTC." Klein added that the "view is it will use more SNPS (maybe CDNS too) EDA tools and that would help SNPS where stock down 35% in a month."
The Intel-Nvidia partnership involves developing multiple generations of products using NVIDIA NVLink to connect their architectures. Intel will build NVIDIA-custom x86 CPUs for data centers and create x86 system-on-chips with integrated NVIDIA RTX GPU chiplets for personal computing devices.
As part of the agreement, Nvidia will invest $5 billion in Intel’s common stock at $23.28 per share, pending regulatory approvals.
Synopsys, which provides electronic design automation software used in semiconductor development, had previously faced challenges from reduced spending by Intel, one of its largest customers. The new collaboration signals potential increased demand for Synopsys tools as these joint development efforts move forward.
Fellow EDA tool provider Cadence Design Systems (NASDAQ:CDNS) also saw its stock rise 3% on similar sentiment.