We recently compiled a list of the 15 AI News That Broke The Internet. In this article, we are going to take a look at where Adobe Inc. (NASDAQ:ADBE) stands against the other AI stocks that broke the Internet recently.

U.S. e-commerce sales hit a record this year on the unofficial shopping holiday, and artificial intelligence has played a starring role. According to Adobe Analytics, online spending has hit $10.8 billion in the US, and Generative AI chatbots drove a 1,800% surge in retail site traffic compared to 2023. These tools helped bargain hunters find deals, compare products, and check out more quickly.

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Similarly, Salesforce revealed that the use of AI-enabled online chat services grew 31% year-on-year on Black Friday, with U.S. Black Friday online sales reaching $17.5 billion, up 7% year-over-year. Digital retailers using generative AI and agents in their customer service experiences saw a 9% higher conversion rate compared to those who did not.

In other news, OpenAI’s chief financial officer, Sarah Friar, told the Financial Times that the company is considering introducing ads on its platform. She further revealed that the company had recently hired Kevin Weil, an executive from Instagram, who was well-suited to the task.

“The good news with Kevin Weil at the wheel with product is that he came from Instagram. He knows how this [introducing ads] works”.

- Sarah Friar, OpenAI’s chief financial officer.

However, a later statement issued by Friar reveals that while OpenAI may be open to the possibility, they currently don’t have any active plans for the same.

“While we’re open to exploring other revenue streams in the future, we have no active plans to pursue advertising.”

A Bloomberg Opinion column by Dave Lee reveals that such an apparent change in statements could be because the AI Company realized that advertisements tend to signal “troubling trends”. The shift may send doubts about the profitability of its subscription-based model, raising concerns about potential “enshittification”, as tech commentator and activist Cory Doctorow famously terms it, where user-focused features are compromised for advertiser-driven engagement and time optimization.

Moreover, OpenAI’s endeavors are so huge that its revenues don’t manage to cover them. The development of advanced AI models would require even greater spending, which is why advertising could be seen as an avenue to help bridge the gap. However, its risks undermine ChatGPT's appeal as an alternative to Google search, potentially disrupting its user experience, Lee noted.

For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

A team of engineers and scientists collaborating at a workstation surrounded by their applications and solutions.

Adobe Inc. (NASDAQ:ADBE)

Number of Hedge Fund Holders: 123

Adobe Inc. (NASDAQ:ADBE) is a strong AI player with two prominent AI products: Sensei and Firefly. On December 3^rd, Adobe Inc. (NASDAQ:ADBE) announced that it is expanding its partnership with Amazon Web Services (AWS) to make Adobe Experience Platform (AEP) available on AWS. The platform will help businesses deliver highly personalized customer experiences, with AI-driven insights through the AEP that help ensure customer experiences are timely and relevant to individual tastes.

Through the AEP, brands can use AWS can tap into a suite of applications powered by AEP including Adobe Real-Time CDP, Adobe Journey Optimizer, and Adobe Customer Journey Analytics.

“Delivering one-to-one personalization across a myriad of digital channels is quickly becoming table stakes for brands. Our collaboration with AWS expands access to Adobe Experience Platform, powering an integrated set of applications that enable timely customer experiences based on deep insights. Brands will have greater flexibility in where they deploy customer data and manage tools and workflows, while leveraging a generative AI assistant to improve productivity and deliver greater ROI for marketing teams.”

- Anjul Bhambhri, senior vice president, Adobe Experience Cloud.

Overall ADBE ranks 2nd on our list of the AI stocks that broke the Internet recently. While we acknowledge the potential of ADBE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ADBE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

 

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Disclosure: None. This article is originally published at Insider Monkey.