Adobe has received a boost from investment bank Morgan Stanley, with the bank upgrading its rating on the tech giant and raising its price target. The move comes as Morgan Stanley believes Adobe can benefit even further from artificial intelligence (AI)-powered products.
Morgan Stanley upgraded Adobe’s rating to overweight from equal weight on Monday, and increased its price target to $660 per share from $510. This new forecast suggests a potential upside of nearly 25%. In recent times, Adobe’s stock has climbed impressively, recording a year-to-date increase of over 57%.
According to Morgan Stanley analyst Keith Weiss, while Adobe may have been slightly late in adopting AI technology, the company still stands to gain significantly from its integration across its product line. Weiss highlighted GenAI products like Firefly, along with enhancements to flagship applications, as key factors that renew confidence in Adobe’s product innovation engine.
Weiss also pointed to Adobe’s popular Creative Cloud, which is expected to drive the company’s earnings-per-share compounded annual growth rate to approximately 17% between 2022 and 2025. With one of the strongest franchises in software, Adobe’s Creative Cloud is well-positioned to incorporate Generative AI functionality into the existing workflows of its extensive subscriber base. This move will not only foster increased customer engagement but also provide an opportunity to monetize incremental productivity for users.
The upgrade from Morgan Stanley reflects growing optimism in Adobe’s ability to leverage AI-powered products effectively and further enhance its offerings. As AI continues to reshape various industries, Adobe’s integration of this technology positions the company for sustained growth and innovation.
Please note that this article has been generated using artificial intelligence and should not be interpreted as investment advice nor an endorsement of any particular investment. Always conduct thorough research and consult with a qualified financial advisor before making any investment decisions.
