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CEVA or SNPS: Which Semiconductor Stock Is Worth Buying Now?
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Key Takeaways
SNPS emerges as the preferred semiconductor stock, backed by stronger operations and price performance.
SNPS gets 82% of revenues from recurring sources, while fiscal Q3 2026 EDA revenues rose 8.5%.
CEVA's Q2 2026 licensing revenues rose 21% to $18.2 million, supported by 10 licensing agreements.
Synopsys, Inc. (SNPS - Free Report) and Ceva, Inc. (CEVA - Free Report) are both semiconductor stocks, benefiting from the AI structural expansion. SNPS offers software and semiconductor IP spanning the chip design flow, from design capture and implementation to verification, signoff and manufacturing.
Ceva benefits from the convergence of Edge AI and wireless connectivity, driven by rising system complexity and growing demand for integrated solutions. Both stocks are prominent participants in the Zacks Computer and Technology sector.
Given this backdrop, a closer examination of their competitive strengths is warranted to assess which company is better positioned within the sector and currently represents the more attractive investment opportunity.
The Case for Synopsys
Synopsys is embedding AI across its portfolio to automate engineering and accelerate design cycles. The company is benefiting from the large AI infrastructure expansion, which is fueling semiconductor R&D, system-level design activity and demand for advanced AI computing capabilities.
Synopsys is gaining from design wins, driven by its product portfolio across advanced technology, design, IP and security solutions. The rising impact of artificial intelligence, 5G, the Internet of Things and big data is driving investments in new computing and machine learning architectures. Synopsys generates most of its revenues from recurring sources, which accounted for 82% of total revenues in the third quarter of fiscal 2026 (ended July 31).
The company is extending AI across Electronic Design Automation (“EDA”), verification and simulation as customers build more specialized chips, multi-die architectures and advanced packages. In the third quarter of fiscal 2026, EDA revenues increased 8.5% year over year, and hardware-assisted verification reached record revenues with 12 new and 66 repeat customer wins. More than 30 active customer engagements were underway as of the third quarter of fiscal 2026. Management expects these agents to increase use of the underlying EDA tools and views that higher workload intensity as an incremental growth opportunity over time.
Synopsys ended the third quarter of fiscal 2026 with $3.61 billion in cash and short-term investments. It repurchased $38 million of stock during the quarter and retained $1.7 billion of authorization. Management raised fiscal 2026 operating cash flow guidance to about $2.8 billion and free cash flow to about $2.6 billion, supporting debt reduction, investment and shareholder returns.
The Case for CEVA
CEVA benefits from licensing silicon and software intellectual property that enables smart-edge devices to connect, sense and process data efficiently. Its portfolio includes edge-AI processors, digital signal processors, sensor-fusion technologies and wireless platforms spanning Bluetooth, Wi-Fi, ultra-wideband, cellular IoT and 5G.
This broad technology base allows Ceva to accelerate product development while reducing design costs and execution risks across automotive, industrial, consumer, mobile and infrastructure markets.
Growing demand for edge AI and wireless connectivity is strengthening CEVA’s licensing momentum. In the second quarter of 2026, licensing and related revenues increased 21% year over year to a three-year high of $18.2 million, supported by 10 licensing agreements. Out of the 10 intellectual property licensing agreements, two were with new customers.
Two of the agreements were also signed directly with original equipment manufacturers, expanding Ceva's relationships further into the end markets using its technology. Additional connectivity agreements were signed with customers across the United States, Europe, China and the broader Asia-Pacific.
These agreements can generate upfront licensing revenues and longer-term royalties as customers move their chips into commercial production, providing CEVA with scalable growth opportunities across the expanding smart-edge ecosystem.
SNPS vs. CEVA: Price Performance, Earnings Surprise History & Valuation Check
Both CEVA and SNPS’ shares have declined in double digits (% wise) over the past three months. The fall in CEVA’s shares is much steeper.
3-Month Price Comparison
Image Source: Zacks Investment Research
SNPS's earnings have outpaced the Zacks Consensus Estimate in each of the past four quarters, whereas CEVA’s earnings have beaten the mark thrice and matched once.
SNPS’ Earnings Surprise History
Image Source: Zacks Investment Research
CEVA’s Earnings Surprise History
Image Source: Zacks Investment Research
CEVA trades at 6.05X forward 12-month sales, below the 7.18X multiple for SNPS.
Image Source: Zacks Investment Research
Conclusion: SNPS vs. CEVA
Agreed that SNPS has a higher valuation, but this is likely due to the strong operational performance, financial flexibility and growing customer base driven by the AI demand surge. SNPS’ better price performance also adds to its appeal.
Based on our analysis, SNPS emerges as the winner in this faceoff between semiconductor stocks and is clearly worth buying now. SNPS currently carries a Zacks Rank #2 (Buy), while CEVA has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
View the Zacks #1 Rank List
Image: Bigstock
CEVA or SNPS: Which Semiconductor Stock Is Worth Buying Now?
Key Takeaways
Synopsys, Inc. (SNPS - Free Report) and Ceva, Inc. (CEVA - Free Report) are both semiconductor stocks, benefiting from the AI structural expansion. SNPS offers software and semiconductor IP spanning the chip design flow, from design capture and implementation to verification, signoff and manufacturing.
Ceva benefits from the convergence of Edge AI and wireless connectivity, driven by rising system complexity and growing demand for integrated solutions. Both stocks are prominent participants in the Zacks Computer and Technology sector.
Given this backdrop, a closer examination of their competitive strengths is warranted to assess which company is better positioned within the sector and currently represents the more attractive investment opportunity.
The Case for Synopsys
Synopsys is embedding AI across its portfolio to automate engineering and accelerate design cycles. The company is benefiting from the large AI infrastructure expansion, which is fueling semiconductor R&D, system-level design activity and demand for advanced AI computing capabilities.
Synopsys is gaining from design wins, driven by its product portfolio across advanced technology, design, IP and security solutions. The rising impact of artificial intelligence, 5G, the Internet of Things and big data is driving investments in new computing and machine learning architectures. Synopsys generates most of its revenues from recurring sources, which accounted for 82% of total revenues in the third quarter of fiscal 2026 (ended July 31).
The company is extending AI across Electronic Design Automation (“EDA”), verification and simulation as customers build more specialized chips, multi-die architectures and advanced packages. In the third quarter of fiscal 2026, EDA revenues increased 8.5% year over year, and hardware-assisted verification reached record revenues with 12 new and 66 repeat customer wins. More than 30 active customer engagements were underway as of the third quarter of fiscal 2026. Management expects these agents to increase use of the underlying EDA tools and views that higher workload intensity as an incremental growth opportunity over time.
Synopsys ended the third quarter of fiscal 2026 with $3.61 billion in cash and short-term investments. It repurchased $38 million of stock during the quarter and retained $1.7 billion of authorization. Management raised fiscal 2026 operating cash flow guidance to about $2.8 billion and free cash flow to about $2.6 billion, supporting debt reduction, investment and shareholder returns.
The Case for CEVA
CEVA benefits from licensing silicon and software intellectual property that enables smart-edge devices to connect, sense and process data efficiently. Its portfolio includes edge-AI processors, digital signal processors, sensor-fusion technologies and wireless platforms spanning Bluetooth, Wi-Fi, ultra-wideband, cellular IoT and 5G.
This broad technology base allows Ceva to accelerate product development while reducing design costs and execution risks across automotive, industrial, consumer, mobile and infrastructure markets.
Growing demand for edge AI and wireless connectivity is strengthening CEVA’s licensing momentum. In the second quarter of 2026, licensing and related revenues increased 21% year over year to a three-year high of $18.2 million, supported by 10 licensing agreements. Out of the 10 intellectual property licensing agreements, two were with new customers.
Two of the agreements were also signed directly with original equipment manufacturers, expanding Ceva's relationships further into the end markets using its technology. Additional connectivity agreements were signed with customers across the United States, Europe, China and the broader Asia-Pacific.
These agreements can generate upfront licensing revenues and longer-term royalties as customers move their chips into commercial production, providing CEVA with scalable growth opportunities across the expanding smart-edge ecosystem.
SNPS vs. CEVA: Price Performance, Earnings Surprise History & Valuation Check
Both CEVA and SNPS’ shares have declined in double digits (% wise) over the past three months. The fall in CEVA’s shares is much steeper.
3-Month Price Comparison
SNPS's earnings have outpaced the Zacks Consensus Estimate in each of the past four quarters, whereas CEVA’s earnings have beaten the mark thrice and matched once.
SNPS’ Earnings Surprise History
CEVA’s Earnings Surprise History
CEVA trades at 6.05X forward 12-month sales, below the 7.18X multiple for SNPS.
Conclusion: SNPS vs. CEVA
Agreed that SNPS has a higher valuation, but this is likely due to the strong operational performance, financial flexibility and growing customer base driven by the AI demand surge. SNPS’ better price performance also adds to its appeal.
Based on our analysis, SNPS emerges as the winner in this faceoff between semiconductor stocks and is clearly worth buying now. SNPS currently carries a Zacks Rank #2 (Buy), while CEVA has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.