Bank of America Calls Synopsys (SNPS) a Lower-Beta AI Play With Catch-Up Potential

Synopsys, Inc. (NASDAQ:SNPS) is one of the AI Stocks in the Spotlight for Investors. On December 11, Bank of America upgraded the stock to “Buy” from neutral and raised its price target to $560.00 from $500.00. The bank said that following latest results, shares of Synopsys are attractive at current levels.

“We believe the relative derisking of China and Intel sales along with strong growth at Ansys clears the decks for Synopsys to provide attractive stock catch-up potential and EPS beats for the next year.”

According to analysts led by Vivek Arya, the company’s non-GAAP EPS guidance for the full fiscal year 2026, at $14.36 midpoint, is well ahead of consensus ($14.11). The team raised its fiscal year 2026/2027 non-GAAP EPS estimates to $ 14.37 and $17, respectively.

“While the stock could consolidate at current-levels after the ~20% recent run, we believe it provides an attractive lower-beta, AI-levered/adjacent candidate with recurring sales tied to more resilient chip design R & D spending.”

Synopsys, Inc. (NASDAQ:SNPS) is a technology company that provides software and services for silicon-to-systems design, including electronic design automation (EDA) tools, silicon IP, and system verification and validation.

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.

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Disclosure: None.