Important points
Adobe (ADBE) stock fell on Thursday after the company’s results a day earlier showed a disappointing revenue outlook, but analysts warned that the company’s monetization of artificial intelligence (AI), even if tempered, was Generally speaking, I have bullish expectations.
Creative Cloud Inc. “has been a frustrating stock for much of FY24,” Mizuho Americas analysts said in a note Thursday. The company maintained its “outperform” rating but lowered its price target from $640 to $620. Adobe stock fell more than 13% shortly after the opening bell and was recently trading 12.6% lower at $480.37. Stock prices fell nearly 20% in 2024.
More expensive Firefly AI toolset now available
Despite the lower price target, Mizuho analysts wrote, “We remain confident that ADBE will continue to significantly monetize its generative AI innovations.”
According to a transcript of the earnings call provided by AlphaSense, Adobe Digital Media president David Wadhwani said the company plans to introduce a more expensive version of the Firefly generation AI toolset. Wadhwani said the service aims to “monetize new users” and increase average revenue per user.
Analysts at Bank of America (BofA) on Thursday lowered their price target for Adobe from $640 to $605, but maintained a “buy” rating on the stock as well.
BofA analysts described the latest quarter as ending “a year of delayed AI gratification,” but said they saw “encouraging leading indicators for re-acceleration into next year.” Ta.