Synopsys shares jump on robust growth outlook, OpenAI and AWS deals

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Oct 1 : Synopsys shares jumped 10 per cent on Thursday after the chip-design software maker forecast fiscal 2027 revenue and profit above analysts' estimates and unveiled deals with OpenAI and Amazon Web Services.

At its investor day in New York on Wednesday, the company outlined a long-term growth outlook that underscored growing demand for its tools as heavy investments in AI fuel increasingly complex chip designs.

Here are some details:

• The company forecast revenue to be between $11.10 billion and $11.20 billion for fiscal year ending October 31, 2027, above analysts' average estimate of $10.81 billion, according to data compiled by LSEG.

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• Its fiscal 2027 earnings per share forecast of $19.04 to $19.12 was also ahead of the estimate of $17.81.

• The company plans to buy back about $1 billion of shares over the coming months.

• Synopsys also targets about 15 per cent compound annual revenue growth from fiscal 2026 through fiscal 2030, and an adjusted operating margin of about 50 per cent by fiscal 2030.

• "The Synopsys 2026 Investor Day, held overnight, provided significantly more than the market expected," brokerage Berenberg said in a note to clients.

• Of the 24 analysts covering Synopsys, 22 rate it "buy" or higher, while two hold, according to LSEG data.

• On Wednesday, Synopsys signed a deal to share revenue with OpenAI to develop an AI model for the chip business.

• Amazon.com's AWS also signed a multi-year deal worth more than $1 billion to license chip-design intellectual property from Synopsys.

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