Munger Mode rating: 3 out of 5 — Hold. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
Let us start where we always start. If we cannot explain the business to a reasonably bright person in a few sentences, we do not own it. Synopsys sells the software that engineers use to design semiconductors. A modern advanced chip contains on the order of a hundred billion transistors. No human being lays those out. Software does — software that synthesizes logic, places and routes the transistors, verifies that the design actually works before anyone spends $20 million on a mask set, and simulates the physics of heat, signal integrity, and power. Synopsys is one of two companies on earth that supplies a complete, foundry-certified flow for doing this at the leading edge. The company reports two segments and, in practice, sells three things: Design Automation (81% of Q3 FY26 revenue, $2.003 billion).
Recent filings analysed: 8-K/A (2026-08-26), 8-K (2026-08-26), 10-Q (2026-08-26), 8-K (2026-08-12).
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