We recently published a list of 10 AI Stocks to Watch on Latest News and Analyst Ratings. In this article, we are going to take a look at where Adobe Inc (NASDAQ:ADBE) stands against other AI stocks to watch on latest news and analyst ratings.
AI discussion boards online are buzzing with a new development where tech experts are pointing to a possible plateauing of performance in artificial intelligence applications.
CNBC’s Deirdre Bosa in a latest program quoted tech investor Ben Horowitz, who said in a recent podcast that he’s not seeing performance improvement despite increasing GPUs.
“We’re increasing GPUs at the same rate, but we’re not getting the intelligence improvements at all out of it.”
OpenAI is reportedly facing similar problems with its upcoming AI model.
“The Information reports that the quality increase in OpenAI’s upcoming advanced model, Orion, is smaller than the jump seen between the last two flagship models, GPT-3 and GPT-4. In other words, generational advancements may have peaked as the models are essentially running out of data to train on,” Bosa said.
While the next jump in AI performance is far away in the future, the possibilities this technology has unlocked based on the existing data and resources are keeping investors and Wall Street analysts busy.
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In this article we take a look at top AI stocks trending on the back of latest news and analyst ratings. 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
Last month, UBS Global Wealth Management published a bullish report on US stocks and issued a list of its top picks. Adobe Inc (NASDAQ:ADBE) was part of the list. The firm said it now has an attractive view on U.S. equities, supported in part by growing adoption of artificial intelligence technology, and the investment bank has listed its top picks in the market.
The firm sees further gains ahead of the market, whose benchmark, the S&P 500 (SP500), has risen +22% this year, including 46 record-high closes. UBS previously had a neutral view on U.S. stocks, but favorable domestic and global factors, such as China’s recent stimulus measures, prompted UBS’s upgrade.
“From a macro perspective, the combination of slowing but durable economic growth, healthy earnings growth, and continued Fed rate cuts are all supportive,” David Lefkowitz, head of equities Americas at UBS GWM, said in its Equity Compass note. While economic growth is slowing, the country’s labor market is “healthy,” with real wages rising, he said.
AI adoption is broadening, with 5.9% of companies reporting using AI as of Q3, up from 3.7% in Q3 2023, UBS said, citing the U.S. Census Bureau. “From a single stock perspective, we think many of the large U.S. tech companies offer appealing long-term upside, especially those that have leading positions in the AI value chain.”
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 Focus Growth Strategy stated the following regarding Adobe Inc. (NASDAQ:ADBE) in its Q3 2024 investor letter:
“We added to several existing positions in the quarter including Adobe Inc. (NASDAQ:ADBE), Workday, Shopify, MSCI, and Paycom Software. We feel Adobe is poised for re-accelerating revenue and earnings growth partially due to the monetization of its Firefly GenAI product embedded in its creative software.”
Overall, ADBE ranks 6th on our list of AI stocks to watch on latest news and analyst ratings. 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.
