We recently published a list of 12 Best QQQ Stocks to Invest in Now. In this article, we are going to take a look at where Adobe Inc. (NASDAQ:ADBE) stands against other best QQQ stocks to invest in now.
Lunch’ to analyze the market’s reaction to the tariff announcements. McCartney referred to the situation as tariff policy ping pong, and highlighted how it adds to the uncertainty in Washington during a time when weak data is emerging from other areas. She explained that this has created a perfect storm of challenges, which includes seasonal pressures that make this time of year difficult. Retail buyers have stepped away from the market, and there is uncertainty for individuals regarding tax policy and for corporations concerning tariffs and taxes. The withdrawal of overleveraged bids has contributed to increased market volatility, which makes it harder for major tech companies to maintain their leadership roles.
The conversation then turned to the influence of key sectors, particularly the MAG7. McCartney noted that when these sectors underperform, they can generate downside pressure on the market, which contrasts with the desire for a broader market trade. She pointed out that while these tech stocks are down year-to-date, the overall market remains materially up and is annualizing at a high single-digit rate. She expressed optimism about market breadth and suggested that this could present a buying opportunity for investors to re-enter big tech.
Tech stocks face short-term volatility due to market uncertainty, but their long-term potential remains intact.
Methodology
We sifted through the Invesco QQQ exchange-traded fund (ETF) holdings to find 12 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
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 373.4% since May 2014, beating its benchmark by 218 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)
Number of Hedge Fund Holders: 117
Adobe Inc. (NASDAQ:ADBE) is a technology company that provides digital media and marketing solutions. Through its Creative Cloud, Document Cloud, and Digital Experience segments, it helps individuals and businesses create, publish, and manage digital content and customer experiences across various platforms.
The company is advancing in AI with tools like Adobe Firefly, which is a GenAI suite for image creation. Morgan Stanley’s Keith Weiss maintained a Buy rating on the company with a $660 price target towards the end of February. This sentiment was supported by the company’s Firefly Video model’s tiered pricing as a strategic move. This pricing aims to boost user adoption and monetization.
The Firefly suite has seen significant adoption with over 16 billion generations across the company’s tools as of Q4 2024. The Firefly Video model, which is integrated into Premiere Pro, has driven a 70% increase in Premiere Pro beta users. Adobe Inc. (NASDAQ:ADBE) is introducing a new and higher-priced Firefly offering that includes the video models. It aims to monetize new users, provide additional value to existing customers, and increase ARPU. This tiered pricing strategy is designed to expand user adoption and improve monetization opportunities.
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 10th on our list of best QQQ stocks to invest in now. While we acknowledge the growth potential of ADBE, our conviction lies in the belief that AI stocks hold great promise for delivering high 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.
