Do You Believe in Synopsys' (SNPS) Boost in Competitive Advantage?
Parnassus Investments, an investment management company, released the 'Parnassus Growth Equity Fund' first quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, the Fund (Investor Shares) returned -8.59% (net of fees), outperforming the Russell 1000 Growth Index's -9.97% decline. In the first quarter, post-election optimism, driven by reduced regulation and a business-friendly environment, drifted away to concerns over fiscal and tariff uncertainties, which increased volatility and raised fears of a recession. In addition, please check the fund's top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Parnassus Growth Equity Fund highlighted stocks such as Synopsys, Inc. (NASDAQ:SNPS). Synopsys, Inc. (NASDAQ:SNPS) offers electronic design automation software products used to design and test integrated circuits. The one-month return of Synopsys, Inc. (NASDAQ:SNPS) was 6.84%, and its shares lost 16.70% of their value over the last 52 weeks. On June 26, 2025, Synopsys, Inc. (NASDAQ:SNPS) stock closed at $495.70 per share, with a market capitalization of $76.913 billion.
Parnassus Growth Equity Fund stated the following regarding Synopsys, Inc. (NASDAQ:SNPS) in its Q1 2025 investor letter:
"Synopsys, Inc. (NASDAQ:SNPS), a provider of semiconductor design software, experienced a similar investor reaction as other semiconductor and technology-focused companies during the quarter, as tariffs, inflation and AI concerns weighed on sentiment.
A close-up of a tech engineer soldering a modern system-on-chip circuit board in a laboratory setting.
Synopsys, Inc. (NASDAQ:SNPS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 67 hedge fund portfolios held Synopsys, Inc. (NASDAQ:SNPS) at the end of the first quarter, which was 72 in the previous quarter. While we acknowledge the potential of Synopsys, Inc. (NASDAQ:SNPS) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.
In another article, we covered Synopsys, Inc. (NASDAQ:SNPS) and shared the list of must-buy AI stocks analysts are betting on. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of SNPS as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.
Disclosure: None. This article is originally published at Insider Monkey.
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