Adobe Q3: $550 Million In Net New ARR Growth Guidance Is Not Bad

Summary:

  • I reiterate a “Strong Buy” rating for Adobe Inc. stock with a fair value of $600 per share, driven by their robust AI capabilities and future growth potential.
  • Adobe’s Firefly Video Model, set to release later this year, will enable AI-powered video generation, enhancing their competitive edge in digital media.
  • Despite weak Q4 guidance for net new digital media ARR, Adobe’s AI investments in tools like Firefly and Adobe Express will drive future growth.
  • Adobe’s digital media and experience platforms are expected to grow by 12% and 9% respectively, supported by AI functionalities and robust subscription growth.

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I published my ‘Strong Buy’ thesis on Adobe Inc. (NASDAQ:ADBE) in June 2024, highlighting their strong AI positions in Firefly. Adobe released a strong Q3 result on September 12th after the bell, while they guided a


Analyst’s Disclosure: I/we have a beneficial long position in the shares of ADBE either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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