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VICR vs. SNPS: Which Stock Offers Better Growth Potential?
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Key Takeaways
Synopsys' Q3 fiscal 2026 revenues surged 42.4%, and non-GAAP EPS rose 15.3%.
Synopsys' $10.9 billion backlog and 82% recurring revenue share provide visibility.
Vicor's Advanced Products revenues rose 45% sequentially to $94.2 million.
Vicor Corporation (VICR - Free Report) and Synopsys Inc. (SNPS - Free Report) are both benefiting from rising investment in artificial intelligence (AI) by serving different parts of the semiconductor ecosystem. Vicor develops high-density power-conversion components that support AI processors, data centers, industrial equipment and defense applications. Synopsys provides electronic design automation (EDA) software, semiconductor intellectual property (IP) and engineering simulation solutions that help companies design and verify increasingly complex chips and electronic systems.
With AI infrastructure expanding and chip designs becoming more sophisticated, both companies have opportunities to benefit from long-term industry growth. So, which stock offers greater upside potential? Let’s compare their growth prospects, business fundamentals, challenges and valuation to determine which presents a more compelling investment case.
The Case for VICR Stock
Vicor is positioned to benefit from the increasing power requirements of AI processors and high-performance computing systems. Its high-density power-conversion technologies, including Factorized Power Architecture and Vertical Power Delivery (VPD), are designed to improve power efficiency and current delivery as computing workloads become more demanding.
The company’s Advanced Products business is emerging as an important growth driver. In the second quarter of 2026, Advanced Products revenues increased 45% sequentially to $94.2 million, accounting for 65.7% of total revenues compared with 57.5% in the preceding quarter. Demand remained healthy across high-performance computing, industrial, aerospace and defense markets, while the book-to-bill ratio stayed above 1.
Vicor’s backlog also signals improving demand visibility. Its 12-month backlog reached approximately $379.7 million in the second quarter of 2026, up 26% sequentially and 145% year over year. Management expects nearly 10% sequential revenue growth in the third quarter and projects more than $600 million in revenues for 2026, supported by Advanced Products growth and licensing income.
Licensing is providing an additional source of revenue for VICR. VICR’s second-quarter royalty revenues increased to $30.4 million from $10.4 million a year earlier, including $15 million recognized from a recent licensing agreement. The agreement is expected to contribute $5 million in the third quarter and $10 million per quarter for the following four quarters. Vicor is also developing second-generation VPD technology with its lead customer and engaging additional original equipment manufacturers and hyperscalers.
With these tailwinds, VICR expects third-quarter revenues to increase nearly 10% sequentially. The Zacks Consensus Estimate for VICR’s third-quarter revenues is pegged at $188.5 billion, indicating a year-over-year rise of 75.7%. The Zacks Consensus Estimate for VICR’s third-quarter earnings is pegged at $1.13, indicating a year-over-year increase of 12%. Estimates have been revised upward in the past 30 days.
Image Source: Zacks Investment Research
The Case for SNPS Stock
Synopsys is well-positioned to benefit from increasing semiconductor design complexity as AI accelerates demand for advanced chips, multi-die architectures, verification and engineering simulation. Its combination of EDA software, semiconductor IP and Ansys engineering simulation capabilities gives the company exposure across the chip-design and system-engineering lifecycle.
Recurring revenues provide considerable visibility. Recurring revenues accounted for 82% of total revenues in the third quarter of fiscal 2026, while backlog stood at $10.9 billion. Total deferred revenues reached approximately $2.72 billion as of July 31, 2026. These contracted revenues support visibility as customers continue investing in advanced semiconductor development.
Synopsys is also expanding its opportunity through Ansys, whose engineering simulation capabilities complement its existing chip-design portfolio. In the third quarter of fiscal 2026, Design Automation revenues, including Ansys, increased 52.7% year over year to $2 billion. Ansys contributed approximately $711 million to quarterly revenues, while management expects cost synergies to support profitability. The companies’ first joint Multiphysics Fusion solutions are expected to contribute to EDA growth beginning in fiscal 2027.
AI-driven engineering workflows offer another growth avenue. Synopsys is developing agentic AI capabilities that automate verification, debugging and other engineering tasks. More than 30 customer engagements were underway for its agentic AI platform as of the third quarter of fiscal 2026. Collaborations with NVIDIA, Microsoft and AMD have demonstrated improvements in verification speed, coverage and debugging efficiency.
The company’s latest results also reflect improving business momentum. Third-quarter fiscal 2026 revenues increased 42.4% year over year to $2.48 billion, while non-GAAP earnings rose 15.3% to $3.91 per share, beating the Zacks Consensus Estimate by 6.5%. Synopsys raised its fiscal 2026 revenue guidance to $9.69-$9.74 billion and its non-GAAP earnings guidance to $15.04-$15.10 per share.
The Zacks Consensus Estimate for SNPS’ fiscal 2026 revenue guidance is pegged at $9.69-$9.74 billion, indicating a year-over-year rise of 42%. The Zacks Consensus Estimate for SNPS’ fiscal 2026 earnings is pegged at $4.12, indicating a year-over-year increase of 42%. Estimates have been revised upward in the past 30 days.
Image Source: Zacks Investment Research
Stock Price Performance and Valuation of SNPS and VICR
Shares of SNPS and VICR have gained 4.4% and 88.5%, respectively, in the year-to-date period.
YTD Performance Chart
Image Source: Zacks Investment Research
SNPS is trading at a forward 12-month Price-to-Sales ratio of 8.57X, which is higher than its median of 8.05X, while VICR is trading at a forward sales multiple of 10.25X, lower than its median of 13.91X.
VICR Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research
Conclusion: SNPS vs. VICR
Although VICR offers substantial exposure to rising AI power requirements, SNPS appears better positioned to deliver more diversified and visible growth. Its recurring revenue base, $10.9 billion backlog, expanding engineering simulation portfolio and growing AI-driven design capabilities provide multiple avenues for expansion. SNPS sports a Zacks Rank #1 (Strong Buy), while VICR carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
View the Zacks #1 Rank List
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VICR vs. SNPS: Which Stock Offers Better Growth Potential?
Key Takeaways
Vicor Corporation (VICR - Free Report) and Synopsys Inc. (SNPS - Free Report) are both benefiting from rising investment in artificial intelligence (AI) by serving different parts of the semiconductor ecosystem. Vicor develops high-density power-conversion components that support AI processors, data centers, industrial equipment and defense applications. Synopsys provides electronic design automation (EDA) software, semiconductor intellectual property (IP) and engineering simulation solutions that help companies design and verify increasingly complex chips and electronic systems.
With AI infrastructure expanding and chip designs becoming more sophisticated, both companies have opportunities to benefit from long-term industry growth. So, which stock offers greater upside potential? Let’s compare their growth prospects, business fundamentals, challenges and valuation to determine which presents a more compelling investment case.
The Case for VICR Stock
Vicor is positioned to benefit from the increasing power requirements of AI processors and high-performance computing systems. Its high-density power-conversion technologies, including Factorized Power Architecture and Vertical Power Delivery (VPD), are designed to improve power efficiency and current delivery as computing workloads become more demanding.
The company’s Advanced Products business is emerging as an important growth driver. In the second quarter of 2026, Advanced Products revenues increased 45% sequentially to $94.2 million, accounting for 65.7% of total revenues compared with 57.5% in the preceding quarter. Demand remained healthy across high-performance computing, industrial, aerospace and defense markets, while the book-to-bill ratio stayed above 1.
Vicor’s backlog also signals improving demand visibility. Its 12-month backlog reached approximately $379.7 million in the second quarter of 2026, up 26% sequentially and 145% year over year. Management expects nearly 10% sequential revenue growth in the third quarter and projects more than $600 million in revenues for 2026, supported by Advanced Products growth and licensing income.
Licensing is providing an additional source of revenue for VICR. VICR’s second-quarter royalty revenues increased to $30.4 million from $10.4 million a year earlier, including $15 million recognized from a recent licensing agreement. The agreement is expected to contribute $5 million in the third quarter and $10 million per quarter for the following four quarters. Vicor is also developing second-generation VPD technology with its lead customer and engaging additional original equipment manufacturers and hyperscalers.
With these tailwinds, VICR expects third-quarter revenues to increase nearly 10% sequentially. The Zacks Consensus Estimate for VICR’s third-quarter revenues is pegged at $188.5 billion, indicating a year-over-year rise of 75.7%. The Zacks Consensus Estimate for VICR’s third-quarter earnings is pegged at $1.13, indicating a year-over-year increase of 12%. Estimates have been revised upward in the past 30 days.
Image Source: Zacks Investment Research
The Case for SNPS Stock
Synopsys is well-positioned to benefit from increasing semiconductor design complexity as AI accelerates demand for advanced chips, multi-die architectures, verification and engineering simulation. Its combination of EDA software, semiconductor IP and Ansys engineering simulation capabilities gives the company exposure across the chip-design and system-engineering lifecycle.
Recurring revenues provide considerable visibility. Recurring revenues accounted for 82% of total revenues in the third quarter of fiscal 2026, while backlog stood at $10.9 billion. Total deferred revenues reached approximately $2.72 billion as of July 31, 2026. These contracted revenues support visibility as customers continue investing in advanced semiconductor development.
Synopsys is also expanding its opportunity through Ansys, whose engineering simulation capabilities complement its existing chip-design portfolio. In the third quarter of fiscal 2026, Design Automation revenues, including Ansys, increased 52.7% year over year to $2 billion. Ansys contributed approximately $711 million to quarterly revenues, while management expects cost synergies to support profitability. The companies’ first joint Multiphysics Fusion solutions are expected to contribute to EDA growth beginning in fiscal 2027.
AI-driven engineering workflows offer another growth avenue. Synopsys is developing agentic AI capabilities that automate verification, debugging and other engineering tasks. More than 30 customer engagements were underway for its agentic AI platform as of the third quarter of fiscal 2026. Collaborations with NVIDIA, Microsoft and AMD have demonstrated improvements in verification speed, coverage and debugging efficiency.
The company’s latest results also reflect improving business momentum. Third-quarter fiscal 2026 revenues increased 42.4% year over year to $2.48 billion, while non-GAAP earnings rose 15.3% to $3.91 per share, beating the Zacks Consensus Estimate by 6.5%. Synopsys raised its fiscal 2026 revenue guidance to $9.69-$9.74 billion and its non-GAAP earnings guidance to $15.04-$15.10 per share.
The Zacks Consensus Estimate for SNPS’ fiscal 2026 revenue guidance is pegged at $9.69-$9.74 billion, indicating a year-over-year rise of 42%. The Zacks Consensus Estimate for SNPS’ fiscal 2026 earnings is pegged at $4.12, indicating a year-over-year increase of 42%. Estimates have been revised upward in the past 30 days.
Image Source: Zacks Investment Research
Stock Price Performance and Valuation of SNPS and VICR
Shares of SNPS and VICR have gained 4.4% and 88.5%, respectively, in the year-to-date period.
YTD Performance Chart
Image Source: Zacks Investment Research
SNPS is trading at a forward 12-month Price-to-Sales ratio of 8.57X, which is higher than its median of 8.05X, while VICR is trading at a forward sales multiple of 10.25X, lower than its median of 13.91X.
VICR Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research
Conclusion: SNPS vs. VICR
Although VICR offers substantial exposure to rising AI power requirements, SNPS appears better positioned to deliver more diversified and visible growth. Its recurring revenue base, $10.9 billion backlog, expanding engineering simulation portfolio and growing AI-driven design capabilities provide multiple avenues for expansion. SNPS sports a Zacks Rank #1 (Strong Buy), while VICR carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.