lmrg5387:
First you need to understand if it is "real" stress or singularity. Convergence methods are given above.
If it is "real" stress, it converges, you just have to consider if it is a problem or not in your design.
Do this stress peak go beyond yield in your simulation? Then if you do a simple static linear analysis you know that the values presented in SW are not correct.
To get a more accurate result you need non-linear simulation where you have the S-S curve of the material.
You will then find that the stress in this area is much lower. Probably somewhere between yield and UTS.
In reality you will have local yielding. That means that the stiffness in this highly localised area is reduced.
Force follow stiffness, so the flow of force will be relocated around this less stiff area and increase the load in the surrounding area.
And thats it. Nothing more happens. If you are below UTS.
However, if you have a cycling loadcase, this area could fail from fatigue, so in that case you should consider to redesign to reduce stress below yield.