Adobe: Delivering On The AI Front Could Be Good News For Investors (Rating Upgrade)

Summary:

  • Adobe’s stock has fallen by more than 20% over the past year, even as fundamentals improved, and there is a good reason for that.
  • Contrary to popular opinion, the stock is not significantly undervalued, but that’s not needed to justify a buy rating.
  • It appears that the current momentum in margin improvements could be sustained and this will provide a much-needed tailwind for the share price.
  • I am changing my near-term outlook on the stock, but will be looking for more solid evidence for sustained margin improvements during the upcoming earnings release.

Adobe headquarters in San Jose, California, USA

JHVEPhoto

About a year ago, in November 2023, I warned that Adobe Inc. (NASDAQ:ADBE) stock was at significant risk of reversal.

Back then, investors were excited about the recent returns as the stock was up roughly 85% over the prior 12-month period


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Please do your own due diligence and consult with your financial advisor, if you have one, before making any investment decisions. The author is not acting in an investment adviser capacity. The author's opinions expressed herein address only select aspects of potential investment in securities of the companies mentioned and cannot be a substitute for comprehensive investment analysis. The author recommends that potential and existing investors conduct thorough investment research of their own, including a detailed review of the companies' SEC filings. Any opinions or estimates constitute the author's best judgment as of the date of publication and are subject to change without notice.

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