Adobe Inc.’s hard push into generative AI is pushing its stock past $500 a share.
The company’s stock
ADBE,
advanced more than 3% in extended trading Thursday after the desktop-publishing pioneer reported quarterly results that topped analysts’ revenue and earnings estimates.
Shares of Adobe have gone gangbusters since early May, spiking 46% as news of its recent AI push resonates with investors. Adobe improved 2% to $490.91 during Thursday’s regular trading session. [Adobe’s all-time closing high was nearly $700 in November 2021.]
Adobe reported fiscal second-quarter net earnings of $1.3 billion, or $2.82 a share, compared with net earnings of $1.2 billion, or $2.49 a share, in the year-ago quarter. Adjusted earnings were $3.91 a share.
Revenue jumped 10% to $4.82 billion from $4.39 billion a year ago.
“Adobe achieved record Q2 revenue demonstrating strong demand across Creative Cloud, Document Cloud and Experience Cloud,” Adobe Chief Executive Shantanu Narayen said in a statement announcing the results. “Adobe’s ground-breaking innovation positions us to lead the new era of generative AI given our rich datasets, foundation models and ubiquitous product interfaces.”
Analysts surveyed by FactSet had expected on average net earnings of $3.79 a share on revenue of $4.77 billion.
Separately, Adobe forecast third-quarter sales of between $4.83 billion and $4.87 billion; FactSet analysts are expecting $4.86 billion.
Shares of Adobe have surged 46% this year. The broader S&P 500 index
SPX,
has increased 15%.
Analysts have increasingly championed the company since March, when Adobe launched Firefly, a new family of generative AI tools it claims helps transform the emerging technology into something that more design professionals can use, instead of dread. In recent days, Wolfe Research jacked its price target to $540 from $420 while Jefferies boosted its price target to $530 from $440, and TD Cowen raised its price target to $500 from $415.
Read more: Adobe enters AI fray with Firefly
“In our view, the fact remains that Adobe has the ‘trifecta’ … of characteristics to be an AI winner -– scale, unique data sets, and a large monetizable customer base,” Last week, Evercore ISI analyst Kirk Materne said in a note Saturday that bumped Adobe’s price target to $475 from $425.
This post was originally published on Market Watch
