Synopsys (SNPS) stock surged 5% as Nvidia (NVDA) announced a $2 billion investment in the electronic design automation firm, aiming to accelerate AI and chip-design tools. Despite a 30% decline from its high, investors applaud the move, with Morgan Stanley predicting SNPS shares to reach $510, up 17% from current levels.

Nvidia CEO Jensen Huang emphasized the partnership’s potential to revolutionize design and engineering, citing Synopsys as instrumental in Nvidia’s foundation. This collaboration solidifies SNPS as a key player in semiconductor innovation, benefiting from the growing demand for AI technology in the industry.

The strategic alliance with Nvidia enhances Synopsys’ competitive position in the EDA space, integrating it deeply with the leading AI computing platform. Despite trading at about 10x sales, significantly lower than Nvidia, SNPS is poised for revenue growth, industry integration, and long-term competitive advantage.

With Norges Bank purchasing over 1.2 million shares of Synopsys in Q3, institutional confidence in the company’s growth trajectory is evident. The NVDA-driven rally pushed SNPS stock above its 50-day moving average, signaling continued bullish momentum in the near term. This partnership aligns SNPS with one of the fastest-growing AI companies, ensuring market relevance and demand for its design tools.

Read more at Yahoo Finance: Nvidia Just Bet $2 Billion on Synopsys. Should You Buy SNPS Stock Too?