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Adobe (NASDAQ:ADBE) shares gained nearly 2% in pre-market trading on Thursday after Bank of America upgraded the enterprise software company, citing its potential gains in artificial intelligence.
Analyst Brad Sills raised his rating on Adobe (ADBE) shares to buy from neutral and boosted his price target to $630 from $575, noting that the company is likely to see incremental growth from AI in fiscal 2024 as it is “ahead of the curve.”
Sills also said the company is well positioned to keep gaining share in its product suite due to competitive advantages, including its large subscriber base for its Creative Cloud suite of products, as well as its distribution channel and the breadth and depth of its digital content and experience software suite.
In March, Adobe (ADBE) unveiled its Firefly AI to make it easier to edit images.
Sills also noted that even without Figma, the company is likely to succeed in collaboration.
“It is clear that Adobe is already developing collaborative capabilities organically and embedding these into key offerings (e.g., multi-player capabilities in Adobe Express),” Sills wrote in an investor note. “If the Figma deal were terminated, Adobe would continue developing features organically to better address critical collaborative features.
Earlier this month, the European Commission said Adobe’s (ADBE) proposed $20B deal to acquire Figma is officially under an in-depth review, citing concerns over a reduction in competition.
Analysts are supremely bullish on Adobe (ADBE). It has a BUY rating from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Conversely, Seeking Alpha’s quant system, which consistently beats the market, rates ADBE a STRONG BUY.