Kim Bolton Synopsys Inc SNPS-Q HOLD Mar 20, 2024

Today they reported strong: in-line revenue, an earnings beat, and raised revenue and earnings guidance. Shares rallied after hours. That said, they said the CEO will resign to become the chair of the board.

They do electronic design automation for all the chips, including Nvidia's. They report in two weeks. Is up 50% since breaking out in June.

Took off once the US 10-year rate came down. Profitable, but highly leveraged. Electronic design automation products to design and test integrated semiconductor circuits. Lots of horses. Leader in EDA, which will help semi industry with labour shortages. Buy here around $518, again just shy of $500. Shouldn't go under $470, and definitely not under $450. No dividend.

Might want to write some calls. For quite a pretty penny, bought a company that does visualizations and simulations. You can own it here around $550, more at $520, and just south of $500.

Their software is powering Nvidia to make GPU chips. SNPS shares have run up as a result, though weakened in the past month. Price-to-cash flow is estimated to fall between 2025 and 2026, so the street expects the company to grow a lot. He believes AI will continue to grow. SNPS's valuation isn't extreme like others in AI.

It trades in line with NVDA, which is going down (though he likes it).

Still owns this and CDNS and Ansys stock, a peer, which dominate this space. The stock is stuck because it's stuck in UK regulations, though he expects it to be approved next year. When it does, SNPS will be the king of this space. His price target is $648. They last beat the top and bottom lines. Buy this at $440-460 or even now.

They boast a good moat and are in a duopoly. They help build computer chips, a huge industry. They are buying Ansys, a similar company with industrial applications.