Adobe stock could push higher on artificial intelligence: Wells Fargo
- Wells Fargo upgraded shares of Adobe Inc on Friday.
- Analyst Michael Turrin explained why in a research note.
- Adobe stock is already up more than 30% year-to-date.
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Adobe Inc (NASDAQ: ADBE) will continue to benefit as investors remain fixated on artificial intelligence, says Michael Turrin – a Wells Fargo analyst.
Adobe stock has upside to $525
Copy link to sectionOn Friday, Turrin lifted his rating on the computer software company to “overweight”. His updated $525 price objective suggests a 20% upside from its previous close.
The bullish call arrives only a day after the multinational said Adobe Firefly (its generative A.I. tool) will be available to its large business customers in the back half of 2023.
Firefly presents a much-required next act for Adobe plus natural extension of the company’s entrenched position within digital media.
Adobe is scheduled to report its quarterly results next week. Consensus is for it to earn $3.0 a share versus $2.70 per share a year ago.
Why else is he positive on Adobe stock?
Copy link to sectionMichael Turrin likes Adobe stock also because the competitive landscape is moderating.
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Adobe Firefly, he added, could help its DM platform in terms of improving its pricing power. The analyst expects artificial intelligence to be a boon for the company’s DX platform as well. His research note also reads:
Gen AI is a tailwind to ADBE as we expect much of the early value to accrue to established platforms and see potential for further break-out as products are monetised.
The two platforms are particularly well-positioned for an environment that has companies exploring ways to trim their IT costs, Turrin noted. He raised his revenue estimates today to reflect the potential boost from Adobe Firefly and related A.I. advancements.
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