Synopsys (SNPS) is fundamentally immune to artificial intelligence disruption fears as its complex tools remain crucial to expensive design processes, BofA Securities said in a Wednesday research report.

The company's joint development of services with Ansys, expected to start rolling out in H1, could drive upside to fiscal 2027 and 2028 estimates, analysts wrote.

The company saw momentum in hardware in fiscal Q1, including a "marquee emulation" win versus Cadence Design Systems' (CDNS) ASIC-driven platform at an AI high-performance computing client, indicating that the gap between the hardware performance of the companies could be smaller than realized, according to the note.

The brokerage said it reiterated its buy rating on the stock and cut its price target to $515 per share from $560.