Shares of Synopsys climbed about 4% Monday as activist investor Elliott Investment Management built a multibillion-dollar stake in the company, CNBC’s David Faber confirmed.
“As AI drives a step change in chip complexity and capital investment, Synopsys is uniquely positioned to benefit from this growth,” Jesse Cohn, Managing Partner at Elliott, told CNBC.
“We believe there is a clear opportunity for Synopsys’s financial performance to more fully reflect the value it delivers,” Cohn added, highlighting Elliott’s plans to help the company “align operational execution, profitability and monetization with its potential and importance to the semiconductor ecosystem.”
The Elliott stake in Synopsys was first reported by The Wall Street Journal.
Elliott declined to provide the exact value of its investment. The firm took a $1 billion stake in Pinterest earlier this month.
Synopsys’ services include electronic design automation and silicon design, which can help develop chips to power artificial intelligence. The California-based company has a market cap of about $80 billion.
In December, Nvidia purchased $2 billion of Synopsys common stock in a computing power partnership.
Nvidia CEO Jensen Huang called the investment “a huge deal” and said the partnership was about revolutionizing design and engineering.
The surge in AI data center construction, powered in large part by Nvidia’s chips, which require large amounts of memory, has contributed to a semiconductor shortage.
Synopsys CEO Sassine Ghazi told CNBC in January that he expects the memory chip “crunch” to continue through 2027.
