- According to Morgan Stanley analyst Keith Weiss, Adobe Inc.'s shares could potentially add another 25% to their already impressive rally over the next year. The creative software maker's stock has surged over 60% this year, driven by optimism surrounding its artificial intelligence (AI) strategy. Weiss has set a Street-high target of $660 for Adobe's shares, which would bring the stock close to its previous record of $688.37 in 2021.
- The recent upgrade in the target price follows Adobe's positive updates to its full-year revenue and profit outlooks, fueled by the implementation of generative AI features across its products. As the company continues to expand its AI offerings, Weiss predicts that Adobe's earnings growth could reach mid or high-teens in the next three years.
Why it matters
The strong rally in Adobe's shares gained momentum since the end of May, with the stock climbing approximately 30% during that period. This growth was sparked by increased investor confidence in the company's AI strategy and reassurance that it can remain competitive with smaller firms specializing in AI technology.