Adobe (ADBE) just reported record quarterly revenue driven by artificial intelligence gains. Will it revive confidence in the stock?
The creative software giant late Thursday posted adjusted earnings per share of $5.31 on revenue that jumped 11% year-over-year to a record $5.99 billion in the fiscal third quarter, above analysts’ estimates compiled by Visible Alpha, as AI revenues topped company targets.
CEO Shantanu Narayen said that with the third-quarter’s revenue driven by AI, Adobe has already surpassed its “AI-first” revenue goals for the year, leading the company to boost its outlook. The company said it now anticipates full-year adjusted earnings of $20.80 to $20.85 per share and revenue of $23.65 billion to $23.7 billion, up from adjusted earnings of $20.50 to $20.70 on revenue of $23.50 billion to $23.6 billion previously.
Shares of Adobe were recently rising in late trading. But they’ve had a tough year so far, with the stock down more than 20% for 2025 through Thursday’s close amid worries about the company’s AI progress and growing competition.
Wall Street is optimistic. The shares finished Thursday a bit below $351, and the mean price target as tracked by Visible Alpha, above $461, represents a more than 30% premium. Most of the analysts tracking the stock have “buy” ratings.
But even that target represents a degree of caution in the context of recent highs. The shares were above $600 in February 2024.