Overview

Morgan Stanley has upgraded Adobe to overweight from equal weight and raised its price target to $660 per share. The bank believes that Adobe can benefit even more from artificial intelligence (AI)-powered products. This upgrade implies nearly 25% upside for the stock, which had already climbed over 57% year to date.

AI Integration at Adobe

Analyst Keith Weiss acknowledges that Adobe may have been “late to the party,” but the company still stands to gain from AI integration across its product line. GenAI products like Firefly, along with enhancements to flagship applications, renew confidence in Adobe’s strong product innovation engine.

Adobe Creative Cloud

Weiss also highlights the popular Adobe Creative Cloud, which could contribute to a compounded annual growth rate of around 17% in earnings per share from 2022 to 2025. With one of the strongest software franchises, Adobe’s Creative Cloud is well positioned to integrate Generative AI functionality into existing workflows of a broad base of subscribers. This enables stickier customer engagement and provides an opportunity to monetize incremental productivity for users.

— AsumeTech’s