Core Viewpoint - The artificial intelligence (AI) sector presents significant investment opportunities, with spending on generative AI expected to rise from $67 billion in 2022 to $1.3 trillion by 2032, indicating substantial growth potential for companies in this space [1]. Company Summaries Adobe - Adobe is a leading provider of design and document management software, with a growing suite of tools for digital marketers [2]. - The introduction of Firefly AI across its creative cloud software enhances user experience and drives conversions from free to paid users [2][3]. - Adobe's competitive advantage stems from its network effect and lock-in effect, making it difficult for users to switch to inferior tools [3]. - Shares are trading around $500, reflecting a forward P/E of 25x for fiscal 2025 earnings, which is considered a fair price given the company's growth and cash flow from subscriptions [4]. Salesforce - Salesforce is the leading provider of customer-relationship management (CRM) software, integrating its products with a new Data Cloud that consolidates data into a unified platform [5]. - The company leverages its vast proprietary data to enhance its AI capabilities, with features like Einstein Copilot improving task efficiency for employees [5][6]. - Shares are currently priced around $240, with a forward P/E of 24.4x, supported by strong free cash flow and a share repurchase program [6]. Meta Platforms - Meta Platforms is heavily investing in generative AI, with plans to spend between $35 billion and $40 billion this year on AI data centers and necessary technology [7][8]. - The company aims to integrate AI into its existing products to enhance user engagement and provide new features for marketers [8]. - Shares are trading around $500, with a forward P/E of 25.3x, and analysts project a 30% compound annual growth rate in earnings per share over the next five years [8].

These three growth stocks look set to ride the artificial intelligence trend to report higher revenue and net income.The era of artificial intelligence (AI) is upon us, and this new technology promises to unleash a new wave of creativity and convenience the likes of which has never been witnessed. AI offers an enticing promise to help automate tasks and achieve feats never accomplished by humans. Investors excited about AI's prospects and wish to ride on this long-term wave can seek growth stocks that utili ...

Certain stocks have seen big moves higher this year. Some of those stocks have risen based on better-than-expected financial results. However, a fair number have increased based on hype surrounding hot corners of the market such as artificial intelligence (AI) and cryptocurrencies. It’s become a running joke that executives are not allowed to hold an earnings call these days without mentioning the ways in which their company benefits from AI.The challenge for investors is to determine which stock prices are ...

Alphabet and Adobe have been crushing it recently.Nvidia (NVDA -3.22%) is a great artificial intelligence (AI) stock. However, it has gotten a bit expensive from a valuation standpoint, which has some investors looking elsewhere for AI investments. I'm in that camp, but fortunately, plenty of AI companies are worth buying right now.Two that come to mind are Alphabet (GOOG 1.44%) (GOOGL 1.89%) and Adobe (ADBE 2.01%). Both companies' shares are trading at reasonable valuations, and both are always fantastic b ...

Artificial intelligence is both an opportunity and a potential risk for this digital media giant.Shares of Adobe (ADBE 0.13%) rallied sharply following a better-than-expected second-quarter earnings report, sending shares to a three-month high.The update helped brush aside some market fears that the digital media software giant may be losing its step amid the emergence of competing artificial intelligence (AI) applications representing a threat to its core business. The stock is still down about 13% in 2024 ...

It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor.Zacks Premium includes access to the Zacks Style Scores as we ...

Short-term challenges pushed this stock price down, but the long-term outlook remains strong.Every so often, the market will put a great stock on sale, and it's important to recognize whether that sale is a buying opportunity or a warning to investors.The market may put a stock on sale because operations are deteriorating, competition is eating into its market share, or for several other legitimate reasons. Sometimes, though, the market ends up weighing near-term challenges much more heavily than a positive ...

Core Insights - Adobe is leveraging its generative AI models, particularly Firefly, to enhance customer experience and expand its solution offerings [1][2] - The integration of Firefly features into Acrobat allows for advanced image editing capabilities within PDFs, marking a significant innovation in the PDF solution market [1][2] - The Digital Media segment, driven by Document Cloud and generative AI solutions, is expected to contribute positively to Adobe's overall financial performance [2][3] Financial Performance - In Q2 fiscal 2024, Adobe's Digital Media segment generated revenues of $3.91 billion, reflecting an 11% year-over-year increase [2] - Document Cloud revenues reached $782 million, up 19% from the prior year [2] - The consensus estimate for total revenues in fiscal 2024 is $21.45 billion, indicating a 10.5% year-over-year growth, with earnings per share estimated at $18.13, a 12.8% increase [3] Market Trends - The generative AI market is projected to grow at a CAGR of 36.5% from 2024 to 2030, presenting significant opportunities for Adobe [4] - Adobe's advancements in generative AI, including the introduction of new Firefly models, position the company to capitalize on this growth [4][5] Competitive Landscape - Adobe has underperformed compared to the Zacks Computer & Technology sector, with a year-to-date decline of 12.4% against the sector's growth of 14.4% [6] - Competitors like Amazon, Alphabet, and Meta Platforms are gaining traction in the generative AI space, with Amazon's Bedrock and Google's Gemini showing strong performance [6][7]

Sustained gains in the tech sector will depend on artificial intelligence investments paying off.The current technology sector rally has been largely driven by Apple, Microsoft, and the semiconductor industry. Broadly speaking, the software industry has been lagging behind. However, Adobe's (ADBE 0.68%) latest quarterly results show that its artificial intelligence (AI) investments are paying off. Meanwhile, Broadcom (AVGO -1.44%) is on track to generate over $50 billion in revenue this fiscal year -- a mil ...

The US government, acting on a referral from the Federal Trade Commission, filed suit against Adobe on Monday for reportedly making its subscriptions confusing and costly to cancel. The suit alleges that Adobe, among other things, hides the existence of an early termination fee when users sign up for the annual subscription plan, revealing the fee only when a subscriber tries to cancel. Adobe's products include Photoshop, Illustrator, Acrobat Reader and others."During enrollment, Adobe hides material terms ...