Two beaten-down semiconductor stocks could see significant upside this year as the chip trade powers ahead, according to Loop Capital. Semiconductor stocks witnessed a blowout rally in 2025 , but most of the well-loved chipmakers in the market were tied to the buildout of artificial intelligence data center infrastructure. Loop Capital expects the semiconductor sector to deliver another year of strong returns in 2026, but is betting on a more broad-based rally, particularly as growth accelerates in automotive and industrial chips. Given this broadening strength, analyst Gary Mobley spotlighted ON Semiconductor and Synopsys as the firm’s mid-cap and large-cap semiconductor stock picks, respectively, for 2026. Mobley lifted his price target on buy-rated Synopsys from $570 to $600. That implies shares of the company, which offers services such as silicon design and electronic design automation used in AI products, could jump nearly 28% from Wednesday’s close. SNPS 1Y mountain Synopsys stock performance over the past year. Shares of Synopsys fell 3% year, but have jumped more than 5% over the past month. The stock got a bit of a boost after Nvidia in early December announced it purchased $2 billion of Synopsys’ common stock as part of a strategic partnership to accelerate computing and AI engineering solutions. According to Mobley, Synopsys should benefit from the growing market of Electronic Design Automation, or EDA, which refers to the specialized software used to design and simulate semiconductor chips before they’re manufactured. Synopsys has also reduced uncertainty around its FY26 forecasts when it issued its initial outlook on Dec. 10, he noted. “We believe the EDA market is entering a new paradigm of growth with AI-enhanced EDA tools results in higher annual contract values once licensees renew,” the analyst wrote in a Friday note to clients. “A combination of China export controls and uneven recovery in the semiconductor industry has recently masked the long-term growth potential of the EDA industry. However, China mix is now relatively small, especially for SNPS.” Mobley’s mid-cap chip stock pick for 2026, ON Semiconductor, could rally 38.5% from its latest close, per his price target of $75 per share. ON Semiconductor shares lost more than 14% in 2025, reflecting concerns about weaker demand in key end markets such as automotive and industrial. Mobley expects that for ON Semiconductor, manufacturing utilization should improve steadily through 2026 after the first quarter and provide a tailwind to margins. Additionally, the analyst noted that the company’s longer-term revenue mix continues to shift toward higher-margin products this year.
