<div id="readability-page-1"><div><p>Synopsys (SNPS) stock has drawn investor attention after recent trading, with the share price closing at US$502.42. Recent moves now sit against a one-month gain of 14.6% and a three-month return of 14.9%.</p> <p>See our latest analysis for Synopsys.</p> <p>The recent pullback over the past week sits against a stronger 30-day share price return of 14.6% and a 90-day gain of 15.0%. The 1-year total shareholder return is slightly negative, and the 5-year total shareholder return is a little more than double. This suggests that near-term momentum has picked up even as longer-term investors have experienced mixed outcomes along the way.</p> <p>If Synopsys has you thinking about where else growth and AI demand could show up, it may be worth scanning 42 AI infrastructure stocks as a starting list of potential opportunities.</p> <p>So with Synopsys posting double digit annual revenue and net income growth, alongside a recent share price rebound, is the stock still undervalued or is the market already pricing in much of its future growth potential?</p> <h2>Most Popular Narrative: 6% Undervalued</h2> <p>At a last close of $502.42 versus a narrative fair value of about $534.65, Synopsys is framed as modestly undervalued, with that gap resting on detailed growth and margin assumptions.</p> <blockquote> <p><em>The acquisition and integration of Ansys positions Synopsys as the global leader in engineering solutions from silicon to systems, dramatically expanding its addressable market into sectors like automotive, industrial, and aerospace. This should drive long-term top-line growth as more sophisticated and complex products (especially AI-powered and smart devices) require robust simulation, analysis, and EDA tools.</em></p> </blockquote> <p><em>Read the complete narrative.</em></p> <p>Want to see what sits behind that valuation gap? The narrative leans on brisk revenue expansion, firmer profit margins, and a rich future earnings multiple. The exact mix of those inputs matters.</p> <p><strong>Result: Fair Value of $534.65 (UNDERVALUED)</strong></p> <p>Have a read of the narrative in full and understand what's behind the forecasts.</p> <p>However, this upbeat narrative can unravel if China related export restrictions persist, or if Ansys integration and cost cuts disrupt execution more than expected.</p> <p>Find out about the key risks to this Synopsys narrative.</p> <h2>Another Way To Look At Valuation</h2> <p>The fair value narrative suggests Synopsys is about 6% undervalued at $502.42 versus $534.65, but the current P/E of 87.1x paints a very different picture. It sits well above the US Software industry at 28.4x, the peer average at 34.9x, and even the fair ratio of 44.9x, which points to meaningful valuation risk if sentiment cools.</p> <p>For a closer look at how those P/E gaps stack up in practice, including what it could mean if the market drifts toward that fair ratio, See what the numbers say about this price — find out in our valuation breakdown.</p> <figure><img height="476" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/bfa6bcf2-a954-4841-9550-4860c62f9cd2/chart/pe-multiple-vs-industry/query-ZGF0ZT0yMDI2LTA1LTE2?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="746" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/bfa6bcf2-a954-4841-9550-4860c62f9cd2/chart/pe-multiple-vs-industry/query-ZGF0ZT0yMDI2LTA1LTE2"/><figcaption>NasdaqGS:SNPS P/E Ratio as at May 2026</figcaption></figure><h2>Next Steps</h2> <p>With sentiment looking mixed, with both opportunities and watchpoints in play, it makes sense to review the full picture for yourself. Act sooner rather than later and weigh the balance of upside against the open questions by checking the 1 key reward and 3 important warning signs</p> <h2>Looking for more investment ideas?</h2> <p>If Synopsys has sharpened your focus, do not stop here; broaden your watchlist with other stocks that fit clear, disciplined criteria using the Simply Wall Street Screener.</p> <ul> <li>Spot potential bargains early by scanning screener containing 22 high quality undiscovered gems that pair strong fundamentals with limited market attention.</li> <li>Strengthen your search for stability with 66 resilient stocks with low risk scores that score well on resilience and lower overall risk.</li> <li>Zero in on financial resilience by running solid balance sheet and fundamentals stocks screener (45 results) that combine solid balance sheets with robust fundamentals.</li> </ul> <p><em> This article by Simply Wall St is general in nature. <strong>We provide commentary based on historical data         and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice.</strong> It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your         financial situation. We aim to bring you long-term focused analysis driven by fundamental data.         Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.         Simply Wall St has no position in any stocks mentioned.</em></p><div><h3><strong>New: </strong>Manage All Your Stock Portfolios in One Place</h3><p>We've created the <strong>ultimate portfolio companion</strong> for stock investors, <strong>and it's free.</strong></p><p>• Connect an unlimited number of Portfolios and see your total in one currency<br/>• Be alerted to new Warning Signs or Risks via email or mobile<br/>• Track the Fair Value of your stocks<br/></p><p>Try a Demo Portfolio for Free</p></div></div></div>

SNPS

SNPX

SOXX

SOXL

<p>Synopsys (SNPS) shares closed at $502.42, reflecting a 14.6% gain over the past month. Despite a slight negative return over the past year, the stock is considered modestly undervalued at 6% below its fair value of $534.65. The integration of Ansys is expected to enhance growth in engineering solutions across various sectors. However, high P/E ratios indicate potential valuation risks. Investors are advised to weigh opportunities against risks, including export restrictions and integration challenges.</p>

Simplywall

Synopsys

Tradr 2X Long SNPS Daily ETF

ISHRS S&P Glb It

iShares Semiconductor ETF

iShares Expanded Tech Software Sector ETF

Invesco Semiconductors ETF

SPDR S&P Software

Direxion Semicon Bull 3X

VanEck Semiconductor ETF

SPDR S&P Semicon

ANSYS

A Look At Synopsys (SNPS) Valuation After Recent Share Price Momentum And Ansys Integration Prospects