Digital media software and marketing company Adobe (ADBE) handily beat Wall Street estimates for its fiscal second quarter. She is also committed to spearheading the “new era of generative AI” with her expertise in creative software and digital content workflows. ADBE stock rose on the news.
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The San Jose, California-based company said late Thursday that it earned $3.91 a share on sales of $4.82 billion in the quarter ending June 2. Analysts polled by FactSet had expected Adobe to earn $3.79 per share on sales of $4.77 billion. On a year-over-year basis, Adobe’s profits jumped 17% while sales were up 10%.
But Adobe offered mixed guidance for the next two quarters.
For the current quarter, Adobe expected adjusted earnings of $3.98 per share on sales of $4.85 billion. This depends on the middle of his routing. Wall Street was modeling earnings of $3.89 per share on sales of $4.86 billion for the fiscal third quarter.
Its full-year guidance included fiscal fourth-quarter adjusted earnings of $4.01 per share on sales of $4.98 billion. Analysts were looking at earnings of $4.05 per share on sales of $5 billion.
ADBE stock is a recent breakthrough
In today’s stock market morning trade, ADBE stock advanced by 3% to 505.73. During Thursday’s session, ADBE stock rose by 2.4%, closing at 490.91.
On June 9, ADBE stock exited the base of the cup at a buy point of 451.15, according to IBD MarketSmith Charts. The move occurred after Adobe announced new enterprise applications for its generative AI software, Firefly.
CEO Shantanu Narain V said New release.
“Adobe’s groundbreaking innovations position us to lead the new era of generative AI due to our rich data sets, foundational models and ubiquitous product interfaces.”
Adobe Likely Key AI Beneficiary
Adobe has three cloud computing companies. The largest of these, Creative Cloud, includes software for creative professionals such as Photoshop and Illustrator. Document Cloud includes Acrobat and electronic signature offerings. Experience Cloud provides marketing software and services.
“This is a defining moment in Adobe’s history, looking at the technologies we’re bringing to life,” CFO Dan Dorn told Investor’s Business Daily, including Firefly’s generative AI. “Generative AI is a very strong objective trend that is circulating in the market right now and Adobe is clearly a leader.”
At least 22 Wall Street companies raised their price targets on shares of ADBE after the company’s earnings report.
Goldman Sachs analyst Kash Ranjan said Adobe’s fiscal second-quarter report confirmed his view that Adobe is a “major beneficiary of AI.” Rangan rates ADBE stock as Buy with a target of 550.
“Its data-driven platform and product-led growth should enable Adobe to seize this opportunity,” Ranjan said in a note to clients.
Adobe is listed on the IBD Tech Leaders list. ADBE stock has an IBD Composite rating of 98 out of 99, according to IBD stock check.
Adobe ranks among the top six stocks in IBD’s desktop-software industry group.
Follow Patrick Seitz on Twitter at @employee For more stories on consumer technologies, software and semiconductor stocks.
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