Adobe (NASDAQ:ADBE) took a 10% hit in early trading Thursday after reporting its latest financial results, but analysts see potential for a rebound as the company ramps up its generative AI revenue. Mizuho's Gregg Moskowitz admitted that Adobe's stock has been frustrating in fiscal 2024.
However, he pointed out that the company is finally starting to see real gains from its AI efforts. While Mizuho trimmed its price target from $620 to $575, it stuck with an Outperform rating, expecting revenue and annual recurring revenue (ARR) to pick up next year. KeyBanc took a more cautious stance, keeping its Underweight rating and lowering its target to $390 from $450. Analyst Jackson Ader noted that Adobe's AI ARR from four standalone products hit $125 million, with plans to double that by year-end.
Meanwhile, Citizens analysts, led by Patrick Walravens, held a Market Perform rating, pointing to rising competition from Canva and Figma as a key challenge. They believe Adobe's real opportunity lies in using AI to streamline workflows across its Creative, Document, and Experience clouds.
On the earnings call, CEO Shantanu Narayen emphasized that AI-driven tools like Acrobat AI Assistant, Firefly App, and GenStudio are already adding more than $125 million in ARR, with expectations to double that figure by the end of fiscal 2025.
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