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NVIDIA (NASDAQ: NVDA) announced a strategic investment of $2 billion in Synopsys (NASDAQ: SNPS) on Monday, aiming to strengthen its position in chip design. The investment was made at a share price of $414.79 and reflects NVIDIA’s intent to control more of the AI supply chain. Market reaction has been positive, with NVIDIA’s stock price increasing by 1.6% to close at $179.92.
This deal comes as NVIDIA reported record revenue of $57.0 billion for fiscal year 2026 Q3, a 62% year-over-year increase, and generated $22.1 billion in free cash flow over three months. The investment supports NVIDIA’s shift towards GPU-accelerated Electronic Design Automation (EDA), reducing chip simulation times from weeks to hours, allowing faster development of next-generation architectures.
Despite challenges from competitors like Alphabet (NASDAQ: GOOG) developing their own chips, NVIDIA’s collaboration with Synopsys aims to maintain its essential role in the semiconductor industry while projecting $65 billion in revenue for Q4 2023, driven by demand for its Blackwell chips.
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