Synopsys (NASDAQ:SNPS) is trending on social media and business news outlets, while SNPS stock is rising slightly in early trading. SNPS is getting attention after Nvidia (NASDAQ:NVDA) mentioned the automation firm during Nvidia’s GPU Technology Conference (GTC) yesterday.
Synopsys “provides electronic design automation software products used to design and test integrated circuits.”
Synopsys Made News at Nvidia’s GTC Conference
Nvidia CEO Jensen Huang mentioned Synopsys after noting that Nvidia’s chips, in conjunction with artificial intelligence (AI), “are accelerating chip and electronics design processes,” Barron’s reported.
Moreover, Synopsys reported that, in tandem with Nvidia, it is attempting to utilize AI to make the development of chips and autos faster.
“Our collaboration with Synopsys on generative AI and digital twins is central to the future design, automation and manufacturing of chips,” Nvidia CEO Jensen Huang “said in a statement.”
According to Nvidia: “A digital twin is a virtual representation of a real-world physical asset or system, which is continuously updated.”
Digital twins can enable computers to be taught skills virtually before using them in the real world, the firm has explained.
More About Synopsys and SNPS Stock
Last month, Synopsys bought Anysys, another software maker, for $35 billion of cash and SNPS stock. Ansys’ software is used “for product design, testing and operations.”
Last quarter, Synopsys’ top line jumped 21% versus the same period a year earlier, while its operating income increased to $359.6 million from $256 million in Q4 of 2022. CEO Sassine Ghazi noted that the firm was getting a lift from its customers’ investments in AI.
SNPS stock currently has a forward price-earnings ratio of 41.67 times, while its price-sales ratio stands at 14.2 times.
What Investors Should Watch Going Forward
Investors should try to gauge the extent to which the partnership between SNPS and NVDA is expanding. Further, they should attempt to ascertain how much Synopsys’ top and bottom lines are being boosted by the partnership.
On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
