Synopsys Inc (NASDAQ:SNPS) rose 7% Thursday morning, a move that analysts are attributing to Intel’s (NASDAQ:INTC) newly announced partnership with Nvidia (NASDAQ:NVDA) rather than any direct company-specific news.
The collaboration between Intel and Nvidia, which involves developing multiple generations of custom data center and PC products using NVIDIA NVLink to connect architectures, has sparked optimism for suppliers of semiconductor design tools. Under the deal, Intel will build NVIDIA-custom x86 CPUs for data centers and x86 system-on-chips integrating NVIDIA RTX GPU chiplets for personal computing devices. Nvidia will also invest $5 billion in Intel stock at $23.28 per share, pending regulatory approval.
Market observers noted that Synopsys, a leading provider of electronic design automation (EDA) software, could benefit from renewed demand from Intel, one of its largest clients, which had previously scaled back spending.
Mizuho TMT Sector Specialist Jordan Klein commented:
“up 10%+ on this news given INTC one of their biggest IP customers and SNPS materially guided lower in that business due to major cutbacks by INTC.” He added, “view is it will use more SNPS (maybe CDNS too) EDA tools and that would help SNPS where stock down 35% in a month.”
Other EDA providers, such as Cadence Design Systems (NASDAQ:CDNS), also saw positive market reactions, with shares rising 3% on similar expectations.
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