Adobe Stock News

Adobe (ADBE) shares plunged nearly 9% Friday amid concerns about its weaker-than-expected outlook, but analysts were bullish on the stock, suggesting the company's projections were conservative and that it could get a boost from artificial intelligence (AI) demand.

Major U.S. equities indexes climbed Friday to wrap up a week of gains as recent data on inflation and the jobs market helped lift expectations that the Federal Reserve could be set for a steeper interest rate cut at its meeting next week. The S&P 500 advanced 0.5% Friday, while the Dow and the Nasdaq both closed around 0.7% higher.

Management's guidance for the current fiscal quarter fell short of analysts' expectations. This disparity suggests that Adobe is having trouble convincing potential customers that its new AI-powered platforms are the must-have options in their categories.

Revenue for Q3 2024 came in at $5.41 billion, outpacing management's guidance of $5.33 billion to $5.38 billion. GAAP diluted EPS was $3.76, surpassing the prior quarter's guidance of $3.45 to $3.50.

Adobe's stock slid 9% on Friday after the company reported a lower forecast for its upcoming quarter than expected, bringing the software firm's shares down into the negative for the year despite beating estimates for earnings and revenue.

Investors needn't worry about Adobe's NASDAQ: ADBE near-term price action because of the longer-term value gains derived from its quality. Adobe investors should instead focus on the bullish longer-term price action.

I reiterate a “Strong Buy” rating for Adobe Inc. stock with a fair value of $600 per share, driven by their robust AI capabilities and future growth potential. Adobe's Firefly Video Model, set to release later this year, will enable AI-powered video generation, enhancing their competitive edge in digital media. Despite weak Q4 guidance for net new digital media ARR, Adobe's AI investments in to...

Adobe beat analyst expectations for its Q3 results but a lower guidance has raised the question of the company's ability to turn AI investments into increased revenue.