Morgan Stanley Lowers PT on Synopsys (SNPS), Maintains an Overweight Rating

Synopsys, Inc. (NASDAQ:SNPS) is one of the Best NASDAQ Stocks to Buy with Huge Upside Potential. On September 11, Lee Simpson from Morgan Stanley lowered the firm’s price target on Synopsys, Inc. (NASDAQ:SNPS) from $715 to $510, while keeping an Overweight rating on the stock.

The price target was reduced after the company missed revenue and EPS estimates for its fiscal third quarter of 2025. The company delivered a revenue of $1.74 billion, up 14.03% year-over-year, but below expectations by $27.28 million. The EPS of $3.39 also fell short of the expectations by $0.36.

The analyst noted a surprise miss in Design IP revenue during the Q3 report. He noted that this was unexpected and overshadowed an otherwise solid quarter. He further added that this raises concerns about the company’s growth for fiscal 2026. Moreover, Morgan Stanley expects the market to lower its earnings expectations for FY26. This is because the Design IP problems are unlikely to be resolved soon.

Synopsys, Inc. (NASDAQ:SNPS) provides engineering solutions for designing and testing integrated circuits and systems. It offers electronic design automation software, silicon design tools, and intellectual property products.

While we acknowledge the potential of SNPS as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey.