An EDA specialist
Ashraf Eassa (Synopsys): Instead of buying Bitcoin, take a look at electronic design automation specialist Synopsys. In a nutshell, Synopsys builds the tools that chip designers use to design their chips. On top of that, Synopsys also develops intellectual properties that chip designers can license and incorporate into their chip designs, which saves those chip designers from having to reinvent the wheel.
One trend that benefits Synopsys is that many companies are starting to design their own chips.
"We see new chip and systems companies entering the market, as big data and [artificial intelligence] are driving new compute and chip architectures optimized for machine learning," Synopsys CEO Aart de Geus said on the company's May 23 earnings conference call .
Synopsys isn't just making pie-in-the-sky promises about the future, though. The company said that its revenue from electronic design automation tools "continues to outpace the competition" (suggesting share gains) and revenue from its intellectual property "continues its double-digit growth."
This all seems to be translating nicely into tangible financial results as the company says that it's "on track for a record revenue and earnings year." Synopsys' revenue guidance for the year is between $3.07 billion and $3.1 billion, with non-GAAP earnings per share expected to come in between $3.76 and $3.83; at the midpoint of each of these ranges, Synopsys' revenue and earnings per share growth would be 13.2% and 10.9%, respectively -- both representing good growth.
The stock isn't super cheap -- it's trading at around 23.54 times the mid-point of its non-GAAP revenue guidance -- but considering its strong execution and the opportunities that seem to lie ahead for the company, the shares still seem worth a look.
