We recently published a list of 8 Best Video Conferencing 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 video conferencing stocks to buy according to analysts.
An Overview of The Video Conferencing Industry
Video conferencing software connects two or more parties virtually through video and audio over an internet connection. During the COVID-19 pandemic when lockdowns shut almost everything, the video conferencing market witnessed a surge in demand. According to a report by Grand View Research, the video conferencing market was valued at around $4.21 billion in 2020 and the valuation rose significantly to around $7 billion in 2022. Moreover, as per the most recent figures. The video conferencing market was valued at $28.61 billion in 2023 and is projected to grow from $33.04 billion in 2024 to $60.17 billion by 2032, indicating a compound annual growth rate of 7.8%.
According to a BBC report published on June 3rd, 2020, during the pandemic, the usage of the video conferencing platform Zoom surged 30 times in April 2020 alone. The report further highlighted that the daily participant usage exceeded 300 million users during peak pandemic times.
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At first, the market growth was driven by the pandemic and lockdowns around the globe, which forced businesses, government organizations, and education institutes to adopt virtual modes of engagement. For instance, in May 2020, the World Health Organization (WHO) held its first-ever virtual assembly. Moreover, educational institutes used videoconferencing software to conduct graduation ceremonies.
Fast forwarding to the post-pandemic era now that the world is back to normal the video conferencing market is driven by the rise in remote jobs and e-learning. According to a report by Pew Research published on March 30, 2023, around 35% of the US workforce was working remotely in 2023. Although this figure was down from 43% recorded in January 2022 and 55% in October 2020, which is the pandemic era, the percentage of remote workers was still up 7% compared to pre-pandemic years.
Looking at the regional insights, North America held the largest market share of around 31% in 2023 as it benefits from the large organizations that are engaged in developing video conferencing software. Moreover, the region is also home to an experienced workforce capable of adopting remote work. In addition to North America, the Asia Pacific region is expected to grow at the fastest CAGR due to the growing interest in digitalization across businesses, governments, and educational institutes.
Looking ahead, the rise and recent developments in artificial intelligence, the Internet of Things, and cloud technologies are expected to further boost the video conferencing market. According to a report by the World Economic Forum, global digital jobs are estimated to grow by around 25% to reach over 95 million indicating the growth prospects for video conferencing software due to its indispensable position for remotely operating organizations.
Our Methodology
To curate the list of 8 best video conferencing stocks to buy according to analysts we used various internet rankings and our previous articles. We compiled a list of video conferencing companies that were most widely held by hedge funds, sourced from Insider Monkey’s Q2 2024 hedge funds database. Next we checked analysts upside potential for each stock from CNN and ranked our stocks in ascending order of their upside potential. Please note that the data was recorded on November 8th 2024.
Why do we care about what hedge funds do? 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 close-up of a hand using a laptop to control an immersive video meeting.
Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 107
Analysts Upside Potential: 29.72%
Adobe Inc. (NASDAQ:ADBE) is a leading global technology company based in the United States, primarily known for its innovative software solutions that enhance digital experiences across various platforms. The company operates through three main segments: Digital Media, Digital Experience, and Publishing and Advertising.
One of the company’s key offerings related to video conferencing is Adobe Connect, a robust web conferencing platform designed for online meetings, webinars, and eLearning sessions. The software supports unlimited webcam streams at DVD quality, allowing participants to engage in face-to-face collaboration. The platform also enables users to share various content types, including presentations, videos, and audio files, without requiring additional downloads.
Adobe Connect falls under the Digital Experience segment of Adobe Inc. This segment focuses on providing tools and solutions that help businesses create, manage, and optimize customer experiences across various digital platforms. The company released its third-quarter results for fiscal 2024 on September 12. The results highlighted that the Digital Experience segment revenue of the company improved 10% year-over-year to reach $1.35 billion. Moreover, the subscription revenue for the segment was also a success as it improved by 12% during the same time to reach $1.23 billion.
Talking about the overall performance of Adobe Inc. (NASDAQ:ADBE), the company achieved a total revenue of $5.41 billion. up 11% year-over-year. Moreover, the GAAP operating income for the company was $1.99 billion.
It ranks as the best video conferencing stock to buy according to analysts.
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 1st on our list of best video conferencing 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 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.