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Synopsys (SNPS) shares closed more than 4% higher on Thursday, July 3 following the White House’s decision to lift restrictions on export of chip-design software to China.
Investors are reading the announcement as an indication that China and the U.S. could soon reach a comprehensive trade agreement, releasing global markets from an overhang that’s plagued them for weeks.
Including Thursday’s gains, Synopsys stock is more than 50% versus its year-to-date low in April.
Easing Export Restrictions to Drive Synopsys Stock
President Donald Trump’s decision to rollback export restrictions is a major win for SNPS shares as the semiconductor software firm currently generated about 10% of its revenue from China.
Eased restrictions will enable Synopsys to resume full access and sales of its chip-design software to Chinese clients – restoring a critical growth channel that had been frozen rather abruptly.
This development boosts near-term revenue visibility and signals tempering geopolitical tensions, which lowers the regulatory risk premium baked into the stock.
Synopsys stock gained following the news because with trade normalization back on the table, investors are pricing in stronger demand, improved margins, and a stable operating environment.
Can SNPS Shares Hit $600 By the End of 2025?
Berenberg analysts expect leniency on export restrictions to unlock significant further upside in SNPS stock.
In late June, the investment firm reiterated its “Buy” rating on Synopsys, citing its dominant position (30% market share) in chip-design software and strong financial momentum.
In May, the company reported better-than-expected earnings for its fiscal Q2 and issued encouraging guidance for the full year.
According to Berenberg, Synopsys shares are headed for $600 or up another 10% from here. Note that SNPS is relatively cheaper to own at a forward price-earnings ratio of 48 than peer Cadence Design Systems (CDNS) at nearly 58x.
Synopsys Remains in Favor Among Wall Street Analysts
Other Wall Street analysts also remain constructive on SNPS shares, especially now that the White House has decided in favor of easing restrictions on export of chip-design software.
Wall Street currently has a consensus “Strong Buy” rating on Synopsys stock with the mean target of about $593 indicating potential upside of some 9% from current levels.
