Shares of Synopsys (SNPS), a leading semiconductor design software provider, are soaring 5.53% in pre-market trading on Thursday following the company's impressive fiscal second-quarter earnings report and raised full-year guidance. The stock's surge comes amid a broader rally in tech stocks, particularly in the chip sector, despite looming concerns over potential US restrictions on chip design software sales to China.

Synopsys reported second-quarter adjusted earnings that exceeded Wall Street expectations. The company raised its fiscal year 2025 adjusted earnings forecast to $15.11 to $15.19 per share, up from its previous guidance and surpassing analyst estimates of $14.89. This positive outlook demonstrates the company's confidence in its business model and continued strong demand for its products, even in a dynamic macroeconomic environment.

The stock's rally is further supported by several analyst firms maintaining or raising their price targets for Synopsys. BofA analyst Vivek Arya increased the firm's price target to $575 from $560, while maintaining a Buy rating. Other firms, including Loop Capital Markets, J.P. Morgan, and Needham, have also reiterated their positive stance on the stock, highlighting Synopsys' strong position in the growing AI and hardware innovation markets.

However, the company faces potential headwinds from reported US government plans to restrict sales of electronic design automation (EDA) software to Chinese customers. Synopsys CEO Sassine Ghazi addressed these concerns during an analyst call, stating that the company has not yet received any notice from the US Department of Commerce's Bureau of Industry and Security regarding such restrictions. The ongoing US-China tech tensions add an element of uncertainty to the company's future performance, despite its current strong financial results.