(Reuters) -Synopsys forecast third-quarter revenue largely above Wall Street estimates on Wednesday, driven by strong demand for its semiconductor design software, as companies ramp up spending on AI chips.
Shares of the company rose nearly 2% in extended trading after falling about 10% during the session following a media report that said the Trump administration had ordered U.S. chip design software firms to cease sales to Chinese groups.
Synopsys, which counts companies such as Nvidia, Intel and Qualcomm among its partners, provides the software and hardware used to design advanced processors.
China typically accounts for about 16% of Synopsys’ annual revenue.
A surge in demand for artificial intelligence technologies has prompted companies to invest heavily in AI chips, propping demand for complex chip design and AI-focused engineering software solutions at Synopsys.
The company projected current-quarter revenue between $1.76 billion and $1.79 billion, while analysts on average expect $1.76 billion, according to data compiled by LSEG.
The Sunnyvale, California-based company reported revenue of $1.60 billion in the second quarter ended April 30, in line with estimates.
(Reporting by Deborah Sophia in Bengaluru; Editing by Mohammed Safi Shamsi)
