Synopsys forecasts stronger Q2 earnings, shares rise

Synopsys Inc. reported a stronger-than-expected earnings performance for the first quarter of fiscal 2025, with adjusted earnings per share of $3.03, surpassing analyst expectations of $2.81. The company's revenue for the quarter was $1.46 billion, slightly above estimates, despite a year-over-year decline. Looking ahead, Synopsys forecasts second-quarter revenue between $1.59 billion and $1.62 billion, driven by increasing demand for its chip design software amid investments from major companies like Amazon and Google. The company also anticipates adjusted earnings per share in the range of $3.37 to $3.42 for the second quarter. Synopsys' strong product announcements and strategic partnerships, particularly in automotive AI solutions, are expected to further boost its growth prospects. However, the stock has underperformed the market year-to-date, raising questions about its future trajectory.