Morgan Stanley upgrades Synopsys, cuts Infineon; 'time to be more selective' (SNPS:NASDAQ)

Synopsys reported Q3 FY2026 revenue of $2.48B, up 42.4% YoY, and raised full-year guidance. Analysts at 24/7 Wall St. predict a 25% upside to $496.97, citing strong fundamentals and AI-driven growth. However, shares are down 15.45% YTD due to China-related challenges and high valuation.

Morgan Stanley upgraded Synopsys (SNPS) to Overweight, maintaining a $500 price target. The stock is trading at $396.11, which is 39.9% undervalued according to its GF Value™ of $659.20. Synopsys has a GF Score™ of 88/100, indicating strong growth potential but concerns about valuation. Insider activity shows significant selling, with $40.7 million in sales over the last three months.

Morgan Stanley upgraded Synopsys to Overweight, citing attractive valuation and growth opportunities. The firm kept its $500 price target. It downgraded Infineon to Equal Weight and lowered its target to €65. ASML's target was cut to €1,700. The semiconductor sector has seen volatility, with Morgan Stanley highlighting potential risks ahead.

Synopsys (SNPS) reported Q3 FY2026 earnings with revenue of $2.48B, up 42.4% YoY, and EPS of $3.91, beating estimates. The company raised its full-year outlook. Analysts maintain 'Buy' ratings with price targets up to $633, citing long-term growth potential in semiconductor design.

Synopsys (SNPS) shares fell 5.9% after reporting Q3 revenue of $2.48B and EPS of $3.91, both above guidance. The company raised full-year targets to $9.715B revenue and $15.07 EPS, but investors reacted negatively due to modest outlook increases, restructuring costs, and acquisition-related expenses. Insider sales and mixed hedge fund activity were also noted.

Synopsys (SNPS) fell 11% YTD despite 42% revenue growth. Analysts expect 31% upside to $544.97. Debt and litigation are concerns, but AI-driven demand and Ansys synergies support bullish outlook. Peers Cadence (CDNS) and Autodesk (ADSK) showed mixed performance.