Synopsys stock climbed 11% to $483.59 early Thursday, making it the top performer in the Nasdaq 100 for the session. The jump followed a 4.8% gain the previous day, putting the chip design software company on track for its best two-day stretch since September 2025.

The rally came after Synopsys held its Investor Day in New York on Wednesday, where it announced two major AI partnerships, raised its long-term growth targets, and unveiled a share repurchase plan. Synopsys makes the software engineers use to design and verify chips before they are manufactured, and both newly announced partnerships are anchored in that business.

OpenAI Partnership Launches GPT-Synopsys

The first announcement involves OpenAI. The two companies are launching GPT-Synopsys, a specialized AI model built for chip design work. Neither company disclosed financial terms, but both confirmed the partnership runs on a multiyear revenue-sharing basis, so Synopsys' economics scale with how widely the tool gets adopted. Synopsys said it is already in talks with major semiconductor customers about adopting the new tool.

Amazon Deal Worth More Than $1 Billion

The second announcement involves Amazon. Synopsys agreed to a deal worth more than $1 billion to work with Amazon on custom chips, expanding Amazon's existing use of Synopsys software and intellectual property.
The agreement also changes how Synopsys gets paid. It uses a license-plus-royalty model, meaning payments should climb as production increases rather than staying fixed.

Both partnerships address a concern that has followed Synopsys for some time: investors worried that AI would let chipmakers handle more design work in-house, cutting into the company's business. Chief Financial Officer Shelagh Glaser pushed back on that idea in an interview with Barron's. "Everybody's building their own chips, and we have insatiable demand," she said.

Higher Long-Term Targets

Synopsys also raised its long-term outlook. The company now targets midteens compound annual revenue growth through fiscal 2030, up from its previous double-digit goal. For fiscal 2027 specifically, Synopsys expects revenue growth of around 15%. It also expects adjusted operating margin to reach roughly 50% by fiscal 2030, up from 44% in fiscal 2027.

The company plans to buy back approximately $1 billion in stock in the coming months, subject to market conditions. Buybacks of this kind return capital to shareholders and reduce shares outstanding.

Wall Street Responds

Analysts responded to the event. StoneX analyst Gary Mobley maintained his Buy rating and $570 price target, writing that AI agents are meant to support engineers rather than replace core design tools. Rosenblatt raised its price target to $620 from $575, implying 43% upside from the stock's prior price of $434.94. The firm also pointed to Synopsys' recent performance: revenue grew 46% over the last twelve months, with an 83% gross margin.

Other firms have turned more positive as well. HSBC upgraded the stock to Buy with a street-high $700 target, while Morgan Stanley and Baird both upgraded their ratings this year.

Year-to-Date Context

Despite the rally, Synopsys shares were still down 7.4% year to date heading into Thursday. Rival Cadence Design Systems has gained 5.6% over the same stretch and was also up 6.1% on Thursday.

Glaser attributed the stock's earlier weakness to AI disruption fears and the integration of Ansys, the engineering-simulation company Synopsys acquired last year for $35 billion. "We had said 2026 was going to be a transitional year," she said, pointing to the Amazon deal as proof that the plan is playing out.

The markers to watch from here include which major semiconductor customers commit to GPT-Synopsys, the pace of the roughly $1 billion buyback, and progress toward the fiscal targets laid out at Wednesday's Investor Day.