15 Stocks with Buy Ratings that Hedge Funds Love

8. Synopsys, Inc. (NASDAQ:SNPS)

No. of Hedge Funds: 72

Value of the hedge funds: $2.37 billion

Headquartered in California, Synopsys, Inc. (NASDAQ:SNPS) is a leading electronic design automation (EDA) software and semiconductor IP provider. The company’s tools enable chip designers to develop and secure complex integrated circuits. Having a worldwide reach, the company serves semiconductor companies, foundries, and systems designers in multiple markets. Synopsys stands apart from its peers with the help of its platform, which integrates AI and cybersecurity capabilities. Specifically, the company is critical in next-gen chip design for AI, automotive, and cloud technologies.

Synopsys, Inc. (NASDAQ:SNPS) is held by 72 hedge funds, as per the Insider Monkey Q4 2024 database, with total investments reaching $2.37 billion. The company achieved a record revenue of $6.13 billion in 2024, surpassing the previous year’s revenue by 15%. A substantial backlog of $8.1 billion suggests high stability in future revenue streams. The sale of its Software Integrity business and the pending acquisition of ANSYS indicate an increased focus on growth segments. The company’s AI capabilities are increasingly being incorporated into the product portfolio. Synopsys.ai solutions, a part of the company’s product portfolio, deliver substantial customer results, including a 4 times improvement in hardware utilization. 2025 guidance revealed a revenue growth target of 10.1% to 11.1%.

Synopsys, Inc. (NASDAQ:SNPS)’s strong foothold in the electronic design automation sector is apparent from the 33.29% EPS growth over five years. Analysts recommend the stock with a Strong Buy rating, increasing their attractiveness among high-income seeking investors.