Piper Bullish on Synopsys as Intel Foundry Improves Now

Key Moments

Upgrade Driven by Intel-Linked IP Momentum

Investing.com — Piper Sandler upgraded semiconductor design software provider Synopsys to Overweight from Neutral and increased its price target to $550 from $450, pointing to a more constructive outlook for the company’s intellectual property (IP) segment as Intel’s foundry strategy gains traction.

The brokerage stated that sentiment has improved “significantly” in recent months around Intel’s 18A-P and its future 14A manufacturing nodes. Synopsys, which provides design tools and IP used in advanced semiconductor development, stands to benefit from what Piper described as a more supportive demand backdrop. The firm believes that renewed foundry activity at Intel could drive a faster-than-anticipated rebound in Synopsys’ IP business, which it noted has historically been tied to some of Intel’s largest programs.

Potential Apple and Google Projects Seen as Catalysts

Analyst Clarke Jeffries referenced recent reports indicating that Apple may adopt Intel’s manufacturing technology for certain upcoming chips, and that Google has chosen Intel to handle roughly half of its TPU production through 2028. Piper Sandler suggested that, should these initiatives proceed, they could trigger incremental IP licensing and design engagements that would be favorable for Synopsys.

The firm further argued that ongoing capacity constraints at leading-edge foundries have enhanced the strategic importance of Intel’s emerging manufacturing offerings. With customers facing heavily utilized production capacity at existing providers, Intel’s foundry roadmap could present an alternative, which in turn may support broader semiconductor design activity and open additional avenues for Synopsys.

Revised Financial Forecasts and Valuation

Alongside the rating upgrade, Piper Sandler adjusted its long-term financial projections for Synopsys. The firm now expects fiscal 2027 revenue of $10.8 billion, up from a prior estimate of $10.7 billion, and increased its fiscal 2027 earnings-per-share forecast to $17.04 from $16.69.

The new $550 price target represents approximately 18% upside compared with Synopsys’ recent share price of $464.58, according to the brokerage.

Key Dependencies and Risk Factors

Piper Sandler emphasized that the upside potential for Synopsys remains closely tied to the scale and durability of customer commitments to Intel’s foundry platform. The firm also underscored that Intel’s 14A process is still under development, making 18A-P-related activity the more meaningful near-term driver.

The brokerage identified several risks to its thesis. These include intensifying competition in electronic design automation (EDA), the possibility of weaker semiconductor research and development spending, and the impact of global trade restrictions on the broader industry and on Synopsys’ growth prospects.