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 3.17% in US morning 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.
