We recently published a list of 15 Best Big Tech 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 big tech stocks to buy according to analysts.
Big Tech comprises some of the largest and most influential companies in the world, recognized for their sheer size, extensive customer base, and financial strength. Leading this group are five major companies that have been at the forefront of the tech sector economy, driving innovation and shaping consumer behavior. Over the years, Big Tech firms have benefited from the widespread adoption of smartphones and high-speed internet, increased demand for digital services, the rise of social media, strong demand for cloud computing, e-commerce, and digital advertising.
How Did the Big Tech Companies Become The Giants They are Today?
Beyond technological advancements, these companies have also benefited from several phenomena. The first is network effects—the more users a platform has, the more valuable it becomes. Other contributing factors include economies of scale as they expanded through acquisitions and the ease of scaling digital businesses globally; access to vast amounts of user data used to enhance products, target ads, and create highly personalized services; and their deep pockets (strong balance sheets) that enabled them to invest heavily in R&D, hire top talent, and operate during challenging times. This financial strength also allowed them to aggressively invest in AI and maintain a first-mover advantage. While challenges persist, we believe these companies will continue to innovate, expand their influence, and shape the future of technology.
In a recent interview with Yahoo Finance, Wedbush Securities’ Global Head of Technology Research, Dan Ives, expressed optimism about the future of Big Tech, stating:
“Microsoft’s $80 billion investment announcement and then Mark Zuckerberg’s announcement that his company plans to spend up to $65 billion on artificial intelligence is “the start of a massive build-out of AI Capex” that I think the Street is massively underestimating. And it’s the multiplier – every dollar spent on a NVIDIA chip, means $8 to $10 multiplier goes to the rest of tech – that’s bullish for tech. Of course, with Trump and Stargate, it just shows that fourth industrial revolution is just starting.”
While Big Tech typically refers to the top five mega-cap companies, we have prepared an extended list of 15 stocks that have made a significant impact on the tech landscape and are equally innovative and transformative as the top five.
Our Methodology
To list the 15 best Big Tech stocks to buy according to analysts, we screened companies with market capitalization of at least $100 billion and potential upside of at least 15%. Ultimately, the stocks were arranged in ascending order of their potential upside.
Note: All pricing data is as of market close on February 3.
At Insider Monkey we are obsessed with 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).
A team of engineers and scientists collaborating at a workstation surrounded by their applications and solutions.
Adobe Inc. (NASDAQ:ADBE)
Upside Potential: 42%
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.
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. 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.
Overall, ADBE ranks 5th on our list of best big tech 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.