We recently published a list of Top 10 Trending AI Stocks to Watch in November. In this article, we are going to take a look at where Adobe Inc. (NASDAQ:ADBE) stands against other trending AI stocks to watch in November.
Amid soaring valuations of AI stocks, beginner investors keep wondering whether they are too late to the AI party. However, investing experts believe that opportunities abound in the AI space because of the nature of this technological revolution.
While talking to Wall Street Journal during the WSJ Tech Live Conference, venture capitalist Martin Casado, a general partner at Andreessen Horowitz, explained why he believes there is no such thing as “too late” when it comes to AI for now.
“When it comes to AI, it really feels like the marginal cost of language, reasoning and creation are going to zero. And if that’s the case, this is a supercycle. And if that’s the case, we’ve got decades. So there’s no “too late.” In that sense, we’re still very, very early.”
The AI revolution is quickly entering the phase where we are seeing real-life use cases as AI is helping companies significantly reduce costs and increase efficiency. According to a detailed report published by Benesch’s AI Commission, an AI-based tool that monitors real-time data from electronic medical records reduced unexpected deaths in hospitalized internal medicine patients by 26%.
Casado also talked about the usability of AI models for actual problem-solving:
“Everybody looks at the OpenAIs. But as far as value creation and integration, if you look at all the private companies, the smaller companies that are building their own smaller models, they are some of the fastest-growing companies we’ve seen in the history of the industry.”
Also Read 10 Best Healthcare Stocks to Buy According to Hedge Funds and 10 Best Mid-Cap Healthcare Stocks to Buy Now.
For this article we picked 10 AI stocks trending on latest news and earnings. With each stock we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Adobe Inc (NASDAQ:ADBE)
Number of Hedge Fund Investors: 107
Adobe (NASDAQ:ADBE) is considered among some of the most worthwhile risks among cloud software stocks, according to an extensive report by Piper Sandler. “We recommend large-cap growth investors lean into more risk and add to positions in Big ‘MAC’,” said Piper Sandler analysts, led by Brent Bracelin. The “Big Mac” in this case refers to MDB, Adobe Inc (NASDAQ:ADBE), and CRM. “These are off-consensus ideas still on average 26% below the 52-week highs with healthy product+margin catalysts and favorable risk-reward profiles,” Bracelin added. Adobe is in a similar position, as it appears ready to recover its losses this year due to its latest AI-powered offerings. “The new innovation product cycle is underappreciated, and could help reignite growth,” Piper Sandler noted.
Adobe Inc (NASDAQ:ADBE) has become a complex case for analysts who are still gauging whether Adobe would be a net beneficiary of the AI boom or a loser. On the one hand, Adobe Inc (NASDAQ:ADBE) is under threat with tons of AI tools good enough to make beginner-level designs, posts and videos for individuals or companies with low or no marketing budget. But on the other hand, the company is launching several AI-powered tools and integrating generative AI tools in its products that could boost its revenue in the future.
Daniel Newman, CEO of Futurum Group, said in a program on CNBC that the latest earnings show the effects of a macro slowdown but Adobe Inc (NASDAQ:ADBE) could benefit if companies decide to use the company’s AI tools to cut its reliance on human workers.
Polen Global Growth Strategy stated the following regarding Adobe Inc. (NASDAQ:ADBE) in its Q2 2024 investor letter:
“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.”
Overall, ADBE ranks 8th on our list of trending AI stocks to watch in November. While we acknowledge the potential of ADBE, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. 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.