Synopsys Inc. (NASDAQ: SNPS)

Synopsys is the world's largest electronic design automation (EDA) company — it makes the software that chip designers use to design chips. Revenue exceeds $6 billion and is growing 15%+ annually. Every advanced semiconductor — from Apple's M-series to NVIDIA's GPUs — is designed using Synopsys tools. The company also has a growing semiconductor IP business (pre-designed chip building blocks) and a silicon verification business. Synopsys and Cadence together form a duopoly in EDA.

Three segments: Design Automation (EDA software — the core), Design IP (licensable chip components like USB, PCIe, DDR interfaces), and Software Integrity (application security testing — being divested). Revenue is almost entirely subscription-based, providing exceptional visibility and recurring income. As chips get more complex, customers need more Synopsys tools and IP — it's a natural growth flywheel.

Aart de Geus co-founded Synopsys in 1986 after leaving General Electric. The company pioneered logic synthesis — automating a step in chip design that was previously done by hand. Synopsys went public in 1992. The proposed $35 billion acquisition of Ansys (simulation software) announced in early 2024 would be the company's largest deal ever, expanding beyond EDA into multi-physics simulation. De Geus transitioned to executive chairman in 2024 after leading the company for nearly 40 years.