We recently published a list of 10 Best Software Infrastructure Stocks to Buy According to Analysts. In this article, we are going to take a look at where Adobe Inc. (NASDAQ:ADBE) stands against other best software infrastructure stocks to buy according to analysts.
Companies today allocate significant resources to various aspects of software infrastructure, including servers and data centers for secure data storage and processing, cloud migration and management for scalable environments, network monitoring and management to ensure stability and security, and communication software. Additionally, software delivery and deployment solutions streamline application deployment, while bug tracking and error handling systems manage and resolve software issues. The increasing demand for cloud computing, digital transformation, and the integration of advanced technologies like artificial intelligence and machine learning are expected to drive substantial growth in the global software infrastructure sector. As organizations continue to prioritize agility, scalability, and efficiency, the software infrastructure market is projected to expand rapidly.
According to a January 2025 report by The Business Research Company, the infrastructure software market size is projected to grow from $210 billion in 2024 to $220 billion in 2025, with a growth rate of 5.1%. The market has experienced strong growth in recent years due to spending on legacy system modernization, the increase in remote work, cybersecurity concerns, automation, and application performance optimization. The research firm anticipates continued strong growth, with the market expected to reach around $283 billion by 2029, at a compounded annual growth rate (CAGR) of 6.5%.
Major players in the sector will continue to play a significant role by investing heavily in enhancing their offerings to capture market share. These companies are focusing on developing innovative solutions that leverage AI and automation to improve operational efficiency and enhance the user experience.
Cantor Fitzgerald analyst Thomas Blakey recently initiated coverage of 18 names in infrastructure and artificial intelligence software. In a research note to investors, he highlighted the growing importance of infrastructure software due to the ongoing secular expansion of AI and generative AI. These developments drive the demand for unified, secure, and highly integrated data systems, observable infrastructure, real-time computing and networking capabilities, and enhanced workflows and collaboration. Additionally, the analyst expects cloud infrastructure platforms to be pivotal in consolidating these functions.
Our Methodology
To identify the 10 best software infrastructure stocks, we conducted extensive research to compile a list of fundamentally strong U.S. listed software infrastructure companies with a market capitalization of $2 billion and above. We then ranked the stocks in ascending order of their potential upside, with the stock having highest upside ranked at the top.
Note: All pricing data is as of market close on February 7.
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A team of engineers and scientists collaborating at a workstation surrounded by their applications and solutions.
Adobe Inc. (NASDAQ:ADBE)
Upside Potential: 44%
Number of Hedge Funds: 123
Adobe Inc. (NASDAQ:ADBE) is a premier software company recognized for its creative and digital marketing solutions. The company provides a comprehensive suite of products, including Adobe Creative Cloud, Adobe Document Cloud, and Adobe Experience Cloud, which cater to a wide array of customers from individual creatives to large enterprises. Adobe’s software solutions are essential for content creation, digital marketing, and document management, establishing it as a key player in the digital transformation arena.
Adobe Inc. (NASDAQ:ADBE) is well-positioned to take advantage of the rising demand for digital content creation and marketing solutions, driven by the growing importance of online presence for businesses. The company’s subscription-based model offers a stable and recurring revenue stream, contributing to its strong financial performance. The total addressable market for its solutions is expected to expand significantly as more businesses adopt digital tools for marketing and content creation.
On January 15, 2025, Exane BNP Paribas upgraded Adobe Inc. (NASDAQ:ADBE) to Neutral from Underperform with a $425 price target, seeing an improved risk/reward at current levels. The firm also believes that the shares may find near-term support as management addresses near-term concerns. During a December 2024 appearance on CNBC, Derek Yan, Senior Investment Strategist at KraneShares, stated that AI integration in Adobe Inc. (NASDAQ:ADBE) products will be a future game changer for the company. He mentioned that customers can now learn its complex software/tools much quicker using AI agents, and with the company’s ‘Adopt first, monetize later’ strategy, monetization will gradually ramp up.
Overall, ADBE ranks 3rd on our list of best software infrastructure stocks to buy according to analysts. While we acknowledge the potential of ADBE to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ADBE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.