A Motley Fool columnist compared IBM and Synopsys as technology stock picks for 2027, and favoured IBM. In fiscal 2025, IBM's revenue rose about 7.6% to nearly $67.5 billion, with net income of roughly $10.6 billion. Synopsys grew revenue 15.1% to nearly $7.1 billion, with net income near $1.3 billion. IBM trades at a forward price-to-earnings ratio of 20.8x against 24.9x for Synopsys. Its price-to-sales ratio is 3.5x versus 9.5x. Over the last four quarters, IBM generated $14.7 billion in free cash flow, compared with $2.7 billion for Synopsys. Return on equity was 36% for IBM and 3.7% for Synopsys. The author called IBM a "proven cash machine" and Synopsys a "barely profitable growth story." Synopsys carries debt from its Ansys merger and faces a securities class action.

Synopsys now stresses a recovery in its chip design IP business, after highlighting its underperformance a year earlier. On its fiscal Q3 2026 call on August 26, 2026, management said Design IP returned to growth, with revenue of $474 million, up about 11% year on year. Ansys, the simulation business Synopsys bought in July 2025, generated about $711 million in the quarter. Synopsys also sold its processor IP solutions business to focus on growth areas. On September 30, 2026, Synopsys and Amazon announced a multi-year IP agreement worth more than $1 billion for Amazon's custom chips. It rests on a licence-plus-royalty model. Caution remains. Design IP's adjusted operating margin was 26.5%, against 45.2% for Design Automation. The stock trades at 80.8 times earnings, against 22.9 for the S&P 500.

Synopsys could benefit as AI spending shifts from building data centres to boosting efficiency, one analyst argues. The chip-design software maker would be her pick through 2030. Synopsys signed a multi-year licensing deal worth more than $1 billion with Amazon for custom chip IP. Its $34.9 billion Ansys acquisition is expected to add $400 million in annualised revenue by fiscal 2029. Management targets 15% annual revenue growth through fiscal 2030, which would lift revenue to nearly $17 billion. Design IP revenue, however, fell 0.7% in the first nine months of fiscal 2026. Shares trade at about 27 times projected fiscal 2027 adjusted earnings. At 20 times 2030 earnings, the stock could reach about $745, or 46% upside; at 15 times, about $559, or 10%.