At All-Time Highs, Is Synopsys Stock A Buy?
Synopsys, Inc (NASDAQ: SNPS) provides a platform on which engineers design and test integrated circuits, commonly know as "chips" among other software applications. The company has been public since 1992 and has grown to be one of the largest software companies in the world.
If you have been shopping for a car lately, or just driven by a dealership with a half-empty parking lot, you know that there is a severe supply shortage of automobiles. The reason for this is simple: they cannot source enough chips to make new automobiles. There are dozens of chips in new automobiles, on average, and this number will only grow with increasingly "smart" cars. Both General Motors (NYSE: GM) and Ford (NYSE: F) have temporarily halted factory production at various times during 2021 due to the shortage.
Synopsys doesn't make the chips, it makes the software that chip makers use to design and test the chips. Synopsys is also a play on the explosive growth in the Artificial Intelligence (AI) market. The company estimates the AI market will grow to $72 billion by 2025 and AI developers rely heavily on technology from Synopsys. The demand for the company's services has likely never been stronger as the company is essential to alleviating our current shortage and its technology is crucial to the future of AI.
Source Fool.com
