Chip design software provider Synopsys exceeded analysts’ fourth-quarter revenue expectations on Wednesday, driven by strong demand for its design and verification tools and sending its shares up 5% in extended trading.

The company has been a key beneficiary of accelerating investment in artificial intelligence and advanced computing, which require increasingly sophisticated chip architectures. Synopsys has also gained momentum from deepening partnerships with industry leaders including Nvidia, Intel and Qualcomm.

Last week, Nvidia invested $2 billion in the company as part of an expanded multi-year collaboration to co-develop new AI-powered design tools for products across various industries.

In November, the Sunnyvale, California-based firm said it would lay off about 10% of its workforce, a move aimed at reallocating resources toward high-growth areas such as AI-driven design and system-level solutions.