Is NVIDIA’s (NVDA) $2 billion Synopsys AI partnership reshaping its engineering software strategy?

• NVIDIA and Synopsys recently announced an expanded multi-year collaboration to accelerate engineering software using NVIDIA AI and computing, in addition to a $2 billion NVIDIA investment in Synopsys and a series of joint AI initiatives for industries such as semiconductors, automotive and aerospace.

• This partnership not only integrates advanced AI workflows and digital twin solutions into engineering software, but also extends the reach of NVIDIA’s accelerated computing platforms across a broad customer base, leveraging cloud and on-premise offerings.

• We’ll explore how the expanded Synopsys partnership and NVIDIA’s deeper push into AI-driven engineering platforms could strengthen the company’s multi-year growth prospects.

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Investors in NVIDIA are generally betting on the company’s ability to drive multi-year growth through dominant AI infrastructure and computing platforms, supported by continued innovation and strong customer adoption. The expanded partnership with Synopsys signals a further expansion of NVIDIA’s AI influence in engineering software, but it does not appear to materially change the near-term catalysts or the key risk of hyperscalers accelerating custom silicon development, which could impact both revenue and margins.

Among the recent announcements, the deepened partnership with HUMAIN to widely deploy NVIDIA’s advanced AI hardware in the US and Saudi Arabia stands out. This broad initiative is directly related to the rising demand for next-generation AI infrastructure, supporting key growth drivers, but also adding complexity to competitive pressure from customers and rivals.

But for all the optimism around product launches and partnerships, the risk of major cloud and enterprise customers pursuing their own ASICs and reducing dependence on NVIDIA remains a factor that investors should consider…

Read the full story on NVIDIA (it’s free!)

NVIDIA’s outlook calls for $337.2 billion in revenue and $187.9 billion in profit by 2028. This scenario is based on 26.8% annual revenue growth and $101.3 billion in profit from the current $86.6 billion.

Find out how NVIDIA’s predictions yield a fair value of $250.39, up 39% from the current price.

421 Simply Wall St Community fair value estimates range from US$90.15 to US$341.12 per share. As hyperscalers develop custom silicon, meaningful shifts in market share and long-term margin resilience could occur.

Discover 421 other fair value estimates on NVIDIA – why the stock could be worth as much as 90% more than its current price!

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This article from Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. We aim to provide you with targeted, long-term analysis based on fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or quality material. Simply Wall St has no positions in the stocks mentioned.

Companies discussed in this article include NVDA.

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