The Six Five team discusses Synopsys Q2 FY24 earnings.
If you are interested in watching the full episode you can check it out here.
Disclaimer: The Six Five Webcast is for information and entertainment purposes only. Over the course of this webcast, we may talk about companies that are publicly traded and we may even reference that fact and their equity share price, but please do not take anything that we say as a recommendation about what you should do with your investment dollars. We are not investment advisors and we ask that you do not treat us as such.
Transcript:
Daniel Newman: Look, there’s the good, the bad. So Synopsys did a recast in the middle of the last quarter, and it sort of created a little bit of confusion, because the initial read out on Synopsys was that it effectively had missed its result on the top line bottom. Had to do with the SIG, the spinoff, and the numbers. But after they actually recasted it, it looks like they basically had a high range of guidance and a beat.
Look, I mean, in the end, Pat, Synopsys is one of the coolest companies most people have never heard about. They’re in the middle of a huge acquisition of Ansys, they’re really important in that whole chip design space, with more and more companies in the automotive space and in the hyperscaler space, all building their own silicon. They are one of the most important technology companies on the planet right now, and starting to get credit for it, but of course, they got kind of slammed on the immediate onset, because people were reading it, and didn’t look at the adjustment that they made on their investor day, and-
Patrick Moorhead: Did they just not believe them or something, like, “Okay, I’m not going to believe what you’re saying here”?
Daniel Newman: For the one time, I don’t have the insight to say for sure, but what I’m telling you is, I was the first on Twitter to come out and say they were wrong when they actually said it was a miss. And thanks for amplifying my tweets so someone would actually see it. Anyways, but we also have-
Patrick Moorhead: But you deleted that one though.
Daniel Newman: No, I didn’t, not that one I kept that one live. It was the one I tweeted later that no one read that I deleted. Yeah, so everyone out there, just know there’s an inside joke here, it’s not actually that funny to me, but there is an inside joke. And look, but here’s the thing about AI. The AI trendline is going to create more chips by homegrown, it’s going to create more chips by all the merchant providers, and it’s going to create a more rapid pace of innovation. We’ve heard Jensen come out on this call basically talk about Blackwell, and then a one-year cadence. This isn’t only going to be NVIDIA, everyone now is going to be beholden to the cadence that’s being created by the godfather of AI himself… I can’t say that anymore. In terms of designing next-level chips. And then of course-
Patrick Moorhead: You know you want to.
Daniel Newman: … the AI and the EDA tools are also going to be used to drive more efficiency, more pricing. And of course, Synopsys brought out generative tools to help companies move even faster with design, which, as we can see, is going to be absolutely necessary, Pat. I’m going to hit this one quick. That’s all I’ve got to say. What do you got?
Patrick Moorhead: Listen, Synopsys is an incredible play. But listen, five years from now, EDA is going to be the power player, they’re going to be… Are they going to be the NVIDIA? I don’t know. But we have more transportable intellectual property, we have more companies who want to develop their own chips, we’re already seeing it with the hyperscalers and the auto companies, and then you’ve got merchant silicon companies doing more chips, more diverse, and you have more designs integrating generative AI capabilities, which you need to re-spin your designs, even on the Internet of Things. And I just think that this company, people don’t understand it. And like 10 years ago, I called hybrid cloud when everybody was saying cloud-only, EDA companies like Synopsys are going to be fire, people just don’t know it yet.
Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
