Synaptics Incorporated (SYNA): A Bull Case Theory

We came across a bullish thesis on Synaptics Incorporated on Value & Momentum Portfolio by Denis D.’s Substack. In this article, we will summarize the bulls’ thesis on SYNA. Synaptics Incorporated's share was trading at $90.75 as of February 11th. SYNA’s trailing and forward P/E were 24.33 and 20.53 respectively according to Yahoo Finance.

Synaptics (SYNA) is emerging as a high-conviction turnaround story, driven by accelerating earnings growth and a strategic pivot toward Edge AI and wireless connectivity. Headquartered in San Jose, the company designs semiconductors spanning touch, display, biometrics, voice, wireless, and embedded processing solutions across mobile, PC, smart home, industrial, and automotive markets.

Operating under a fabless model, Synaptics focuses on R&D and platform design, positioning itself as a strategic silicon and software partner to global OEMs. Its Astra AI processors and Veros wireless portfolio anchor its push into AI-native edge devices, further strengthened by the January 2025 acquisition of Broadcom’s Wi-Fi assets to expand its Wi-Fi 7/8 and Bluetooth capabilities.

Financially, the turnaround is tangible. After struggling through fiscal 2024, Synaptics has returned to strong profitability with earnings growth of +35–70% YoY and consistent 25–45% beats, fueled by a 74% surge in Core IoT sales. Revenue growth has stabilized in the low teens, and leverage remains manageable with a 0.32 debt ratio and healthy liquidity. However, negative free cash flow in seven of the last eight quarters reflects elevated R&D spending and acquisition-related integration costs, which remain the primary investor concern.

Valuation reflects skepticism, with SYNA trading at meaningful discounts to semiconductor peers on P/S and EV/Sales metrics despite a reasonable 22.9x P/E. The bull case hinges on successful integration of Broadcom’s wireless assets, margin expansion toward 15%+ by FY2027, and accelerating adoption of Astra silicon as Edge AI demand grows. While tariff concerns and volatility persist, analysts remain broadly bullish with price targets clustering around $95–$106. If execution continues and margins inflect, Synaptics offers asymmetric upside as a leveraged play on AI moving from the cloud to the edge.

Previously, we covered a bullish thesis on Monolithic Power Systems, Inc. (MPWR) by Hidden Market Gems in April 2025, which highlighted its fabless model, high margins, diversified customer base, and attractive AI exposure amid macro-driven market selloffs. MPWR's stock price has appreciated by approximately 113% since our coverage. Denis D. shares a similar view but emphasizes on Synaptics’ turnaround execution and Edge AI platform expansion.

Synaptics Incorporated is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 27 hedge fund portfolios held SYNA at the end of the third quarter which was 29 in the previous quarter. While we acknowledge the risk and potential of SYNA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SYNA and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.