Adobe Inc. (NASDAQ:ADBE) is among the 14 Best Cloud Computing Stocks to Buy Right Now. HSBC Reduces PT on Adobe Inc. (ADBE) Stock On February 13, HSBC reduced its price objective on the company’s stock to $302 from $388, while keeping a “Hold” rating, as reported by The Fly. As per the firm, there are competitive risks for Adobe Inc. (NASDAQ:ADBE) from the AI-powered tools, which threaten to commoditize its core creative franchise. In a separate release, Piper Sandler downgraded Adobe Inc. (NASDAQ:ADBE ...

Core Insights - The S&P 500 has increased by 68% since the launch of OpenAI's ChatGPT in November 2022, primarily driven by gains in big tech stocks, while companies like McDonald's and Starbucks have also benefited from AI-driven productivity expectations [1] - Adobe has faced significant challenges, with its shares down 21% due to fears that AI content-creation technologies may render its services obsolete [2] - Despite the negative sentiment, Adobe reported record revenue of $19.41 billion for the fiscal year following ChatGPT's debut, with a 17% year-over-year earnings growth [5] Financial Performance - Adobe's revenue and net income have shown consistent growth over the past few fiscal years, with revenue increasing from $17.61 billion in 2022 to $23.77 billion in 2025, representing an 11% year-over-year growth in 2025 [6][7] - Net income rose from $4.76 billion in 2022 to $7.13 billion in 2025, indicating strong financial health despite market challenges [6][7] - Earnings per share (EPS) increased from $10.10 in 2022 to $16.70 in 2025, reflecting the company's ability to enhance shareholder value [7] Market Sentiment - There is a rising short interest in Adobe's stock, reaching an eight-year high, indicating growing pessimism among investors [4] - The media has raised concerns about Adobe's future, with some questioning whether it is a "falling knife" [3] - Despite bearish sentiment, there are arguments suggesting that the current market outlook may overlook Adobe's strong fundamentals and growth potential [4]

Group 1 - Adobe Inc. is considered one of the most undervalued tech giants, with 67% of analysts giving it a 'Buy' or equivalent rating and a median price target of $422.50, indicating an upside potential of 19.73% [1] - The company reported fourth-quarter results on December 10, achieving an EPS of $5.50, slightly above the estimate of $5.40, and revenue of $6.19 billion, exceeding the forecast of $6.11 billion [2] - Following the fiscal Q4 report, analysts have adjusted their price targets, with Citi raising it to $387 from $366 while maintaining a 'Neutral' rating, and BMO Capital trimming it to $400 from $405 while keeping an 'Outperform' rating [1][3] Group 2 - Adobe operates through various segments including Digital Media, Document Cloud, Creative Cloud, Digital Experience, and Publishing and Advertising, and aims to transform the world through personalized digital experiences [4] - Despite the potential of Adobe as an investment, there are opinions suggesting that certain AI stocks may offer greater upside potential with less downside risk [4]

Adobe Inc. (NASDAQ:ADBE) is included among the 12 Best Long Term US Stocks to Buy Now. Phillip Maintains Buy on Adobe (ADBE), Sees Steady Growth Into FY26 Photo by nathan dumlao on Unsplash On December 15, Phillip Securities lowered its price target on Adobe Inc. (NASDAQ:ADBE) to $487 from $560.The firm kept a Buy rating. The change is more about valuation than doubt. Phillip says Adobe’s Semrush acquisition adds real weight to its marketing tools and improves how the pieces fit together. Looking ahead, ...

Core Insights - Adobe is a leading global software company known for its digital content creation tools, including Creative Cloud, Document Cloud, and Experience Cloud solutions [2][3] - The company has recently partnered with OpenAI to integrate its tools into ChatGPT, aiming to expand its user base and enhance engagement [3][4] - Adobe's stock has faced challenges due to rising competition from AI tools, leading to concerns about its market position [5][7] Financial Performance - Adobe reported record revenue of $6.19 billion for Q4 FY2025, a 10% year-over-year increase, surpassing Wall Street's expectations [10] - Remaining Performance Obligations (RPO) reached $22.52 billion, indicating strong customer commitments, with current RPO at 65% [11] - Non-GAAP EPS for Q4 was $5.50, up 14.3% from the previous year, exceeding the consensus estimate [11] Business Segments - The Digital Media segment generated $4.62 billion in Q4 revenue, growing 11% year-over-year, while Digital Media ARR increased to $19.20 billion, up 11.5% [13] - The Digital Experience segment, which includes marketing and analytics tools, reported $1.52 billion in revenue, marking a 9% year-over-year growth [13] Future Outlook - Adobe anticipates total revenue of $25.90-$26.10 billion for fiscal 2026, representing approximately 8.8% growth at the midpoint [15] - The company aims for double-digit ARR growth in fiscal 2026, driven by its AI-enabled ecosystem and strong subscription base [14] Analyst Sentiment - Analysts maintain a "Moderate Buy" consensus rating for Adobe, with 21 out of 36 experts recommending a "Strong Buy" [16] - The average price target for Adobe is $461.84, suggesting a potential upside of 30.14%, with the most optimistic forecast reaching $660, indicating a possible 85.95% increase [17]

Core Viewpoint - Both Adobe and Salesforce have lost favor on Wall Street, yet their fundamentals continue to strengthen, presenting a dilemma: they could either be the most attractive stocks in the software sector or companies in decline whose downturn has not yet reflected in financial data [1]. Adobe Financial Performance - Adobe is set to release its Q4 FY2025 earnings report on December 10, which will provide insights into its performance for the fiscal year and expectations for the next fiscal year [3]. - The company's success over the past decade is attributed to its transition to a subscription-based business model, with nearly 97% of revenue coming from subscriptions. The revenue breakdown includes approximately 74% from digital media, 25% from digital experience, and 1% from publishing and advertising [4]. - For FY2024, Adobe's revenue target is set at no less than $23.65 billion, with expectations of quarterly revenue surpassing $6 billion for the first time [4][7]. - The projected net profit margin for the current fiscal year is expected to exceed 30%, with earnings per share (EPS) estimated between $16.53 and $16.58, leading to a trailing P/E ratio of approximately 20.5 [4][7]. Revenue Guidance and Growth - Adobe's revenue guidance has been consistently raised throughout the year, with the latest targets exceeding earlier projections made in March [8]. - Over the past decade, Adobe's core financial metrics have shown steady improvement, with no signs of adverse impacts from AI on its business. The average annual revenue growth rate for its products from 2021 to 2024 is projected to be no less than 12%, with Document Cloud experiencing a compound annual growth rate of 23% [8]. AI Integration and Market Perception - Concerns about AI disrupting Adobe's business model may be overstated, as the management has emphasized that AI presents significant growth opportunities [10]. - Adobe's professional user base requires high-quality tools, and while AI can enhance content production efficiency, it also increases the demand for post-processing, which could drive growth for Adobe [10][11]. - The integration of AI into Adobe's core products, such as Photoshop and Illustrator, is being executed through Adobe Firefly, which uses authorized datasets to mitigate legal risks [11]. - The adoption of AI features has led to a 70% penetration rate among eligible customers using Adobe Experience Platform's AI assistant, indicating that AI is becoming a growth driver rather than a threat [13][14]. Valuation and Stock Buyback - Adobe's current P/E ratio stands at 20, with a forward PEG ratio of 1.16, suggesting it is undervalued compared to typical tech valuations. The forward EV/EBITDA ratio is 12.4, and the forward P/FCF ratio is 15.34 [14]. - If Adobe maintains a 12% net profit growth rate, its forward P/E could drop to 14.9 by 2026, indicating a valuation more typical of industrial companies despite its tech-level profitability [15]. - The company has been actively repurchasing shares, with a total buyback of nearly $12 billion over the past four quarters, reflecting confidence in its undervalued stock [15][16]. Investment Outlook - Analysts view Adobe as an attractive investment opportunity, likely to yield substantial returns in the coming years, as the divergence between market narratives and the company's fundamentals becomes more pronounced [18]. - A comparison is drawn to Google's previous undervaluation, suggesting a similar turnaround could occur for Adobe by 2026 [19].

Core Viewpoint - Adobe is under market scrutiny as it approaches its earnings report on December 10, with expectations that its AI strategy will yield positive results after a significant stock price decline of over 50% since January 2024 [1] Group 1: Financial Performance - In Q3, Adobe reported a revenue of $5.99 billion, a year-over-year increase of 11%, and an adjusted EPS of $5.31, exceeding market expectations [3] - The management raised its full-year revenue guidance to between $23.65 billion and $23.7 billion, with adjusted EPS projected between $20.80 and $20.85 [3] - The Digital Media segment generated $4.46 billion in revenue, up 12% year-over-year, while the Digital Experience segment saw revenue of $1.48 billion, a 9% increase [3] Group 2: Market Sentiment and AI Focus - Investors are particularly interested in Adobe's ability to monetize its AI tools, moving beyond vanity metrics to actual revenue generation [4] - The adoption rates and subscription growth of AI features in Creative Cloud and Document Cloud are critical indicators for investors [4] - There is a competitive pressure from emerging companies like Canva and Figma, as well as tech giants like Meta, which are integrating more AI functionalities [4] Group 3: Divergent Analyst Opinions - Wall Street analysts have differing views on Adobe, with Barclays setting a target price of $415, indicating a 26% upside, while Citigroup lowered its target to $366 due to growth concerns [6] - Piper Sandler maintains an "overweight" rating with a target price of $470, while Wells Fargo also keeps an "overweight" rating but reduces its target from $470 to $420 [6] - The bullish perspective highlights Adobe's valuation at historical lows with a projected P/E ratio of about 15 times and a free cash flow yield of approximately 6.5% [6]

Core Viewpoint - Adobe is in the spotlight as it approaches its earnings report on December 10, with market participants betting on a successful AI strategic transformation after a significant stock price drop of over 50% from its peak in January 2024. The stock has recently rebounded, rising over 7% in the last five trading days, with Wall Street expecting Q4 revenue to reach $6.1 billion, a year-on-year increase of 8.9%, and adjusted EPS of $5.39, up 12.1% from the previous year [1][3]. Financial Performance - In Q3, Adobe demonstrated solid financial performance with revenue of $5.99 billion, a year-on-year increase of 11%, and adjusted EPS of $5.31, exceeding market expectations. The management raised the full-year revenue guidance to between $23.65 billion and $23.7 billion, with adjusted EPS guidance of $20.80 to $20.85 [3]. - The digital media segment generated $4.46 billion in revenue, up 12% year-on-year, while annual recurring revenue (ARR) reached $18.6 billion. The digital experience segment reported $1.48 billion in revenue, a 9% increase year-on-year. However, analysts expressed dissatisfaction with the 11% ARR growth, considering it underwhelming for a tech company [3][4]. AI Monetization Focus - The earnings call will focus on Adobe's progress in monetizing its AI tools, particularly how the company converts its generative AI tools, like Firefly, into actual revenue. Investors are keen to know the adoption rates of AI features in Creative Cloud and Document Cloud, as well as subscription growth [4]. - There is a need for management to disclose how many enterprise users upgraded to higher-priced subscription tiers for AI functionalities, as the direct incremental revenue from Firefly remains unclear [4]. Divergent Investment Opinions - Wall Street's assessment of Adobe shows significant divergence, with Barclays setting a target price of $415, implying a 26% upside, while Citigroup lowered its target price to $366 due to growth concerns. Piper Sandler maintains an "overweight" rating with a target price of $470, while Wells Fargo also keeps an "overweight" rating but reduces its target price from $470 to $420 [5][6]. - The bullish perspective highlights Adobe's valuation at historical lows, with a projected P/E ratio of about 15 times and a free cash flow yield of approximately 6.5%. The company is actively repurchasing shares, providing support for shareholder returns [6]. - Conversely, bearish concerns focus on signs of slowing growth and pressures from AI investments. Citigroup points out that the ARR growth for Creative Cloud may slow, and increased AI development spending could squeeze profit margins [6]. Key Indicators to Watch - Investors should pay close attention to key indicators in the upcoming earnings report, including the growth trend of digital media ARR, actual quarter-on-quarter growth of AI priority product ARR, and management's growth guidance for fiscal year 2026 [7]. - Historical trends suggest that Adobe's fiscal guidance tends to be conservative. If the FY2025 revenue guidance indicates a growth rate below 10%, the market may classify Adobe as a "low-growth value stock," leading to further valuation declines. Conversely, if management emphasizes that AI pricing strategies will fully take effect in the second half of 2025 and provides higher-than-expected margin guidance, it could reignite investor confidence in growth [7].

Core Insights - Adobe is in the spotlight as it approaches its earnings report on December 10, with a stock rebound of over 7% in the last five trading days after a decline of more than 50% from its peak in January 2024 [1] - Wall Street expects Adobe's Q4 revenue to reach $6.1 billion, a year-over-year increase of 8.9%, with adjusted earnings per share projected at $5.39, reflecting a 12.1% growth compared to the same period last year [1] Financial Performance - In Q3, Adobe reported solid financial results with revenue of $5.99 billion, up 11% year-over-year, and adjusted earnings per share of $5.31, exceeding market expectations [3] - The management raised the full-year revenue guidance to between $23.65 billion and $23.7 billion, with adjusted earnings per share expected to be between $20.80 and $20.85 [3] - The digital media segment generated $4.46 billion in revenue, a 12% increase year-over-year, while the digital experience segment saw revenue of $1.48 billion, up 9% [3] Market Sentiment - Investors are cautious yet optimistic about Adobe's performance, as indicated by the stock's post-earnings report reaction, which initially surged 8% but later settled at a 2.77% increase [3] - There are concerns regarding the quality of growth, particularly with an annual recurring revenue (ARR) growth of 11% being viewed as insufficient for a tech company [3] AI Strategy and Market Competition - The focus of the upcoming earnings call will be on Adobe's progress in monetizing its AI tools, with investors eager to know how these tools translate into actual revenue [4] - Adobe faces competition from emerging companies like Canva and Figma, as well as tech giants like Meta, which are integrating more AI features [4] - Key metrics for investors include the adoption rates of AI features in Creative Cloud and Document Cloud, as well as subscription growth [4] Analyst Opinions - There is a significant divergence in Wall Street's assessment of Adobe, with Barclays setting a target price of $415, implying a 26% upside, while Citigroup lowered its target to $366 due to growth concerns [6] - Piper Sandler maintains an "overweight" rating with a target price of $470, while Wells Fargo also keeps an "overweight" rating but reduces its target from $470 to $420 [6] - The bullish perspective highlights Adobe's valuation at historical lows, with a projected price-to-earnings ratio of about 15 times and a free cash flow yield of approximately 6.5% [6] Growth Concerns and Future Guidance - The decision to stop separately disclosing digital media ARR has raised concerns about growth transparency [6] - Investors should focus on key indicators such as the growth trend of digital media ARR, actual quarter-over-quarter growth of AI priority product ARR, and management's growth guidance for fiscal year 2026 [6] - Historical trends suggest that Adobe's fiscal guidance tends to be conservative, and if the FY2025 revenue guidance indicates growth below 10%, the market may categorize Adobe as a "low-growth value stock" [7]

Adobe Inc. (NASDAQ:ADBE) is one of the most profitable tech stocks to buy. On December 4, Citi lowered the firm’s price target on Adobe to $366 from $400, while keeping a Neutral rating on the shares. This announcement was made ahead of the company’s Q4 2025 earnings report. The firm anticipates that the company will slightly exceed its revenue estimates but has lowered its margin forecasts. In the previous quarter, Adobe achieved record revenue of $5.99 billion in Q3 2025, which marked 10% year-over-year ...