Adobe Inc.’s blistering rally has further to go, according to Morgan Stanley analyst Keith Weiss, who sees the creative software maker’s shares adding a further 25% over the next year.
Adobe has jumped 57% this year, fueled by optimism over its artificial intelligence strategy, and Weiss’s new Street-high target of $660 sees the stock rising to within a whisker of its 2021 record of $688.37.
“Greater clarity on AI-enabled products and the monetization roadmap increase our confidence in reaccelerating the creative cloud organic growth engine,” Weiss wrote in a note, upgrading the stock to overweight from equal-weight.
Adobe shares gained as much as 2.3% in US premarket trading on Monday.
The upgrade follows last month’s increases to full-year revenue and profit outlooks by the San Jose, California-headquartered company as it rolls out generative AI features throughout its products. Weiss predicts that Adobe’s earnings growth can return to mid or high-teens over the next three years.
This year’s rally in Adobe’s shares has only really got going since the end of May, with the stock up 40% in that period as the maker of software such as Photoshop gave investors a glimpse of its AI strategy and calmed worries that it would get left behind by smaller firms specializing in the new technology.
READ, Adobe Rally Shows Perils of Calling Losers in AI Era: Tech Watch
--With assistance from James Cone.
