Synopsys (SNPS) – the largest maker of software for semiconductor design – reported 2Q22 earnings. While semiconductor companies have been warning recently SNPS may be immune. That’s because semiconductor makers don’t want to fall behind in an always fast-evolving space and so are loathe to skimp on Research & Development (“Still Time To Chip In On Synopsys” Dan Gallagher, WSJ).

SNPS 2Q22 results support this thesis: Revenue was +18%, EPS +16% and they increased their outlook for the fiscal year ending in October. While the stock is quite expensive at more than 40x current year EPS guidance, SNPS is likely a long term winner as semiconductors become more and more integrated into all sorts of products.

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