Adobe stock received a boost Monday from Morgan Stanley analyst Keith Weiss, who raised his rating and target price on the company's big push into generative-artificial-intelligence creative software tools.
Weiss lifted his rating on Adobe stock (ticker: ADBE) to Overweight from Equal Weight, while boosting his target price to $660 from $510. On Monday, Adobe shares are 3.27% higher at $546.17.
Weiss writes in a research note that the upgrade reflects "greater clarity" on the direction of Adobe's AI-enabled products, adding that the company's " monetization road map" increases his confidence that Adobe's creative software business can reaccelerate from here. He thinks the company can post mid-to-high teens annual earnings growth over the next three years.
Adobe recently announced plans to offer an enterprise version of Firefly, a suite of generative-AI tools that were launched earlier this year.
The analyst writes that he sees a "clear catalyst path for estimates to move higher." For the short run, he thinks Adobe can surpass its "conservative" guidance for growth in its digital media business. And longer term, he sees upside from the rollout of generative-AI software.
"GenAI products like Firefly coupled with enhancements to flagship applications renew our confidence in a robust product innovation engine at Adobe," Weiss writes. "Supported by one of the strongest franchises in software, Adobe's Creative Cloud is well positioned to integrate generative-AI functionality into existing workflows of a broad base of subscribers, enabling stickier customer engagement and opportunity to monetize incremental productivity provided to users."
Weiss notes that he raised his revenue forecast for the November 2025 fiscal year by $1.99 billion, 8% above his prior estimates, to reflect the lift from AI software.
