Synopsys rises on WSJ report of Elliott’s new multibillion-dollar stake
Software company Synopsys is up 3% in premarket trading on Monday after The Wall Street Journal reported that Elliott Investment Management, a well-known activist fund, has taken a multibillion-dollar stake in the company.
Elliott managing partner Jesse Cohn told the WSJ that “Synopsys is essential to the global chip industry,” and that it is “uniquely positioned to benefit” as the AI industry continues to require more capital, more complex chips, and therefore, more software to design them.
The firm’s investment is predicated on a “clear opportunity for Synopsys’ financial performance to more fully reflect the value it delivers.” While memory stocks like Micron have been on a tear recently, Synopsys has dropped 8% over the past year, lagging behind its biggest rival, Cadence Design Systems, which is up 6% in the same period.
Citing people familiar with the investment in Synopsys, the Journal reports that Elliott sees room for the company to boost sales and improve its margins to be more in line with that of Cadence. In its fiscal year 2025, Cadence notched an adjusted operating margin of nearly 45%, while Synopsys eked out only 37%.
Elliott managing partner Jesse Cohn told the WSJ that “Synopsys is essential to the global chip industry,” and that it is “uniquely positioned to benefit” as the AI industry continues to require more capital, more complex chips, and therefore, more software to design them.
The firm’s investment is predicated on a “clear opportunity for Synopsys’ financial performance to more fully reflect the value it delivers.” While memory stocks like Micron have been on a tear recently, Synopsys has dropped 8% over the past year, lagging behind its biggest rival, Cadence Design Systems, which is up 6% in the same period.
Citing people familiar with the investment in Synopsys, the Journal reports that Elliott sees room for the company to boost sales and improve its margins to be more in line with that of Cadence. In its fiscal year 2025, Cadence notched an adjusted operating margin of nearly 45%, while Synopsys eked out only 37%.
