Adopting artificial intelligence tools in chip design gave Synopsys wings in 2023. After a massive AI rally, the Nvidia partner is in a buy range again, making Synopsys today's selection for IBD 50 Growth Stocks To Watch.
Synopsys' buy range goes up to 602.46 from a buy point of 573.77. Shares also are finding support at the 10-week moving average, according to the chart tools on IBD MarketSurge.
Sales and earnings growth have been steady over the past eight quarters, giving Synopsys stock a place on the IBD Long Term Leaders list. Revenue grew 21% to $1.6 billion while earnings of $3.56 a share climbed 36%.
Shares broke out ahead of earnings and gapped up on Feb. 22 after first-quarter results. The stock then pulled back to the 50-day moving average before rising past its buy point again.
Year to date, Synopsys stock has gained more than 16%, compared with 10% for the S&P 500. In 2023, the electronics design automation leader jumped more than 60%, more than double the S&P 500's 24% rise.
Synopsys Stock Gets Lift From Nvidia Partnership For AI Tools
Synopsys designs the software and hardware used in electronic systems for automation. The stock leads the computer software design group and holds a Composite Rating of 98 and EPS Rating of 99.
The Relative Strength Rating of 87 is adequate. In 2023, Synopsys' AI tools for design automation became a key way of reducing the design time for chip manufacturers. In more recent news, Synopsys has integrated Nvidia's platform for computational lithography to speed up the chipmaking process for systems.
Mutual funds own 58% of outstanding shares of Synopsys. A rising number of funds have been net buyers of Synopsys stock over the past seven quarters.
Recent purchases by mutual funds have given the stock an Accumulation/Distribution Rating of B. The Artisan Mid Cap Fund (ARTMX) and the MFS Growth Fund (MFEGX) hold shares of Synopsys stock.
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