Synopsys (SNPS 3.35%) is a company in a hurry. Its acquisition of engineering simulation software company Ansys in 2025 opened up new markets and broadened its customer base. However, the icing on the cake would come later in the year with Nvidia's (NVDA 1.53%) $2 billion investment as part of a partnership that will significantly enhance its offerings and growth potential. Here's why.
Synopsys is an exciting growth stock for 2026
The company's core competency is in electronic design automation (EDA), artificial intelligence (AI)-powered solutions that help engineers design and test semiconductors. As you might expect, the core customers for EDA solutions are the semiconductor companies. Still, the reality is that with the growth of the intellectual quotient as part of a product's value inexorably increasing, the market is broadening quickly and now encompasses hyperscalers, automakers, aerospace companies, the defense industry, and a host of other end markets.
NASDAQ: SNPS
Key Data Points
That broadening explains why the Ansys acquisition is so important. engineering simulation software has a much broader customer base, many of which are growing into the EDA market. Moreover, the addition of Ansys creates a so-called "silicon-to-systems" offering that enables engineers to design a chip and test its results using engineering simulation software.
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Where Nvidia comes in
The silicon-to-systems solution has enormous benefits and opens up EDA sales to companies that use Ansys' simulation software, but it's also extremely compute-intensive. That's where Nvidia comes in. Not only will its $2 billion investment strengthen Synopsys financially, but the integration of Nvidia's computing power will significantly enhance the silicon-to-systems offering.
All told, the Nvidia deal is an integral part of Synopsys' growth strategy and looks likely to power significant growth for many years to come.
