We recently published a list of 10 AI Stocks Everyone is Talking About These Days. In this article, we are going to take a look at where Adobe Inc. (NASDAQ:ADBE) stands against other AI stocks everyone is talking about these days.
President Donald Trump’s $500 billion investment plan to build AI infrastructure, Stargate, is making waves as analysts believe the project provides a new growth catalyst for major tech companies. Sasha Ostojic, Playground Global venture partner, said in a latest program on CNBC that the plan is just the beginning of AI “renaissance” in the country:
“Stargate is just the beginning, I think, of this renaissance of AI technology in this country, even though it seems like we’ve been in it for a few years. And, you know, it reminds me of the Apollo program from the 50s and 60s. In that case, it was a government-run program that created a bunch of technology, propelled the world forward, created a bunch of companies, and set us up for a lot of prosperity in the decades to follow.”
Ostojic also talked about the Jensen Huang-led company and said its stock has been going “sideways” and the market is waiting for the next big “trigger.” He is bullish on the company and thinks the $500 billion plan with the company at its center could be the next growth catalyst investors were waiting for.
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For this article, we picked 10 AI stocks currently trending on the back of the latest news. 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: 123
Adobe Inc. (NASDAQ:ADBE) was recently downgraded by Deutsche Bank amid a lack of “tangible” evidence for monetizing artificial intelligence.
“Although management has praised Firefly’s potential, we haven’t yet seen its effect on the financials,” said Deutsche Bank analyst Brad Zelnick in a note to clients. “Full-year [constant currency net-new annual recurring revenue] still slowed for the third consecutive year on a dollar basis in FY24, with Street estimates anticipating further deceleration in FY25.” Zelnick lowered his rating on Adobe to Hold from Buy and reduced his price target to $475 from $600.
Zelnick also expressed concerns about the health of Adobe Inc. (NASDAQ:ADBE) core Creative business, noting that Creative Cloud growth may have been affected by the allocation of Document Cloud and Cyber Monday, both of which occurred in fiscal 2025’s first quarter.
Parnassus Core Equity Fund stated the following regarding Adobe Inc. (NASDAQ:ADBE) in its Q3 2024 investor letter:
“Also in the Information Technology sector, we exited a position in Adobe Inc. (NASDAQ:ADBE) and initiated a new one in Synopsys. Adobe is contending with market cyclicality, rising competition and lofty AI monetization expectations that are unlikely to be met in the near term. We sold Adobe for Synopsys, which faces fewer competitive threats and has room to grow as companies adopt Synopsys software for custom semiconductor design.”
Overall, ADBE ranks 5th on our list of AI stocks everyone is talking about these days. 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 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.