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Nvidia Invests $2 Billion in Synopsys
Nvidia has invested $2 billion in Synopsys (NASDAQ: SNPS) as part of a strategic partnership aimed at enhancing AI capabilities and developing the Omniverse. The announcement was made on a Monday, with Synopsys’s stock rising 3.7% to $414.79 per share following the news.
The collaboration focuses on product development, marketing, and creating cloud-ready solutions to improve simulation and AI performance. Synopsys reported that the investment was executed at a slight discount to market prices, and this transaction has already yielded profits for Nvidia.
Despite the immediate positive market reaction, concerns persist about Synopsys’s high valuation, with a P/E ratio exceeding 41 and a price-to-free cash flow ratio of 61.5, while its revenue growth is projected to be below 10% annually over the next five years.
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