8 Best AdTech Stocks to Buy Now

5) Adobe Inc. (NASDAQ:ADBE)

Number of Hedge Fund Holders: 108

Adobe Inc. (NASDAQ:ADBE), together with its subsidiaries, carries out its operations as a diversified software company worldwide. The company works through three segments: Digital Media, Digital Experience, and Publishing and Advertising.

Over the past 5 years, Adobe Inc. (NASDAQ:ADBE)’s stock return crushed the returns delivered by Dow Jones Industrial Average. While the broader index saw an increase of ~50.0%, shares of Adobe Inc. (NASDAQ:ADBE) went up by ~79%.

This growth in the company’s shares was led by its creative products, Photoshop and Illustrator. Strong execution coupled with market-leading products have supported the company’s 2Q 2024 results. During the quarter, the company saw its revenues and EPS increase by ~11% and ~24% YoY, respectively. Growth in earnings surpassed revenue growth by a wide margin, which demonstrates operational efficiencies.

Analysts at Sanford C. Bernstein upped their price objective on shares of Adobe Inc. (NASDAQ:ADBE) from $653.00 to $660.00, giving the stock an “Outperform” rating on 17^th June. Wall Street analysts are quite optimistic about its GenAl offering, Firefly. They tagged Adobe Inc. (NASDAQ:ADBE) as a beneficiary with a real opportunity to monetize GenAl over the near term.

The company raised its annual targets, considering its market-leading products and financial discipline. For FY24, Adobe Inc. (NASDAQ:ADBE) expects total revenue in the range of $21.40 billion – $21.50 billion and earnings per share of $11.80 to $12.00 on a GAAP basis. According to the Insider Monkey database, 108 hedge fund portfolios held Adobe Inc. (NASDAQ:ADBE) at the end of the first quarter of 2024, up from 105 in the previous quarter.

Polen Capital, an investment management company, published a second-quarter 2024 investor letter. Here is what the fund said about Adobe Inc. (NASDAQ:ADBE):

“With Adobe Inc. (NASDAQ:ADBE), in some ways, we see it as a microcosm of the market’s “shoot first, ask questions later” approach to categorizing AI winners and losers. In the early part of last year, Adobe came under pressure with a perception that generative AI (GenAI) would represent a material headwind to their suite of creative offerings. In short order, the company introduced its GenAI offering, Firefly, which shifted the narrative to Adobe as a beneficiary with a real opportunity to monetize GenAI in the near term. Earlier this year, that narrative was again challenged as the company reported a slight slowdown in revenue growth. Results in the most recent quarter were robust as the company raised its full-year forecast across a number of key metrics and showcased better-than-expected results.”