AI is fueling demand for more complex chips, helping Synopsys raise its annual revenue forecast to as much as $9.74 billion.
Synopsys has raised its fiscal 2026 revenue and profit forecasts, supported by growing demand for advanced semiconductor design tools as artificial intelligence (AI) accelerates investment in chips and data centre infrastructure.
The electronic design automation (EDA) software provider now expects fiscal 2026 revenue of $9.69 billion to $9.74 billion, compared with its previous guidance of $9.63 billion to $9.71 billion. The revised outlook is also slightly above analysts’ estimate of $9.68 billion, according to LSEG data.
Synopsys said the AI boom is prompting chipmakers to develop increasingly sophisticated semiconductor systems, while major technology companies such as Amazon and Alphabet are expanding their own chip development efforts. This is increasing demand for software and intellectual property (IP) that can help engineers manage complex designs and shorter development cycles.
The company’s design IP business, which licenses pre-designed chip interfaces for integration into customers’ semiconductor products, returned to year-on-year revenue growth in the third quarter ended July 31. Synopsys expects the business to post another sequential increase in the current quarter.
Chief Financial Officer Shelagh Glaser said AI is the key factor supporting the broader semiconductor design environment. As customers develop more complex chips within tighter timelines, EDA tools are increasingly important for managing design challenges.
Synopsys also raised its fiscal 2026 adjusted earnings forecast to $15.04-$15.10 per share, up from its previous guidance of $14.72-$14.80. Analysts had expected annual adjusted earnings of $14.76 per share.
For the third quarter, the company reported $2.48 billion in revenue, exceeding the $2.44 billion expected by analysts. Adjusted earnings stood at $3.91 per share, ahead of the $3.67 consensus estimate.
Despite the stronger results and improved outlook, Synopsys shares declined around 2% in extended trading.
The revised guidance reflects the growing importance of EDA software and semiconductor IP as AI-driven chip development expands and manufacturers seek to deliver more advanced processors in shorter design cycles.
