Synopsys stock has risen nearly 15% this year on investor enthusiasm for the idea that the semiconductor design tools provider will benefit from the growing need for complex chips to handle artificial intelligence workloads.
In a meeting with analysts Wednesday afternoon, Synopsys presented a revised financial model that includes stepping up the company's bet on the power of AI while removing some of its slow-growing businesses. .
Synopsis…
Synopsys stock has risen nearly 15% this year on investor enthusiasm for the idea that the semiconductor design tools provider will benefit from the growing need for complex chips to handle artificial intelligence workloads.
In a meeting with analysts Wednesday afternoon, Synopsys presented a revised financial model that includes stepping up the company's bet on the power of AI while removing some of its slow-growing businesses. .
Synopsys announced that as a result of its previously announced strategic review, it has decided to sell its Software Integrity Group business, which generates approximately $500 million in annual revenue. Reflecting this move, the company has revised its earnings forecast for the fiscal year ending October 2024.
The company now expects annual revenue to be between $6.06 billion and $6.12 billion, an increase of 14% to 15.1% excluding the software integrity business. Previous guidance had expected growth of 12.4% to 13.5%, or $6.57 billion to $6.63 billion.
The company now expects adjusted full-year earnings to be between $12.86 and $12.94 per share, an increase of 21.9% to 22.6%. Previous guidance had been for a profit of $13.47 to $13.55, including the units currently for sale.
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Synopsys also said it expects its automotive electronic design business (chip design tools) to grow at least 12% on a compounded basis through 2028, but that AI could drive growth by an additional 2 percentage points per year. .
In late trading on Wednesday, Synopsys was up 0.9% at $595.
Email Eric J. Savitz at eric.savitz@barrons.com.