10 Best Software Infrastructure Stocks to Buy According to Analysts

8. Synopsys Inc. (NASDAQ:SNPS)

Upside Potential: 23%

Number of Hedge Funds: 53

Synopsys Inc. (NASDAQ:SNPS) is a leading provider of electronic design automation (EDA) software and services, specializing in the development of integrated circuits and systems. The company offers a comprehensive suite of tools that enable designers to create, verify, and manufacture complex semiconductor devices. Synopsys’ solutions are critical for various applications, including automotive, consumer electronics, and artificial intelligence, supporting the design and verification of chips that power modern technology.

Synopsys Inc. (NASDAQ:SNPS) announced a deal to acquire Ansys (NASDAQ:ANSS) for $35 billion in January 2024, which is still awaiting regulatory approvals and is expected to close in the first half of 2025. Throughout 2024, Synopsys has been rationalizing its product portfolio to gain these approvals. On January 6, 2025, both companies announced the sale of Ansys’ PowerArtist business (a design-for-power platform) to Keysight Technologies Inc. (NYSE:KEYS) as a necessary measure to secure regulatory approval for the acquisition. During the second week of January, Synopsys Inc. (NASDAQ:SNPS) received Phase 1 approvals from the UK CMA and the European Commission.

The company is well-positioned to benefit from the increasing complexity of semiconductor designs driven by advancements in AI, machine learning, and IoT. With hyperscalers and original equipment manufacturers (OEMs) bringing more of their design flow in-house, Synopsys Inc. (NASDAQ:SNPS) is expected to see increased demand for its Electronic Design Automation tools and services.