We recently published a list of the 13 NASDAQ Stocks with the Highest Upside Potential. In this article, we are going to take a look at where Adobe Inc. (NASDAQ:ADBE) stands against other NASDAQ stocks with high upside potential.
On April 7, Dan Ives of Wedbush Securities joined CNBC’s ‘Squawk on the Street’ to discuss how the current tariff environment could impact tech supply chains. Musk’s actions and Trump’s tariffs have contributed to broad economic uncertainty, which Ives also referred to as the economic Armageddon for US tech in an earlier conversation. He expressed concern about the structural supply chain challenges posed by recent tariffs and geopolitical tensions. Ives highlighted that the US tech sector has historically maintained an edge over China but this could be wiped out if manufacturing were relocated to the US. The logistical hurdles of building manufacturing plants in the US are not negligible and it would take 4 to 5 years to establish facilities capable of sustaining production levels comparable to those in Asia.
He also acknowledged that he hasn’t downgraded major stocks like the ones in MAG7 but remains cautious. If these previously highlighted issues persist for months, Ives anticipates drastic cuts in earnings. This uncertainty surrounding tariffs could lead to lower demand for emerging technologies like AI and cybersecurity. He explained that this situation could severely impact the US tech companies and lead to broader cuts across the tech sector — potentially up to 25% in earnings. He also criticized Elon Musk’s political involvement, which he believes has caused permanent damage to his brand and customer base. He estimated a 20% demand destruction in Europe and 10% in the US.
Our Methodology
We used the Finviz stock screener to select the 13 stocks with the highest analysts’ upside potential (at least 35%) as of April 8. The stocks are ranked in ascending order of their upside potential. We have also added the hedge fund sentiment for each stock, as of Q4 2024, which was sourced from Insider Monkey’s database.
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)
Average Upside Potential as of April 8: 54.09%
Number of Hedge Fund Holders: 117
Adobe Inc. (NASDAQ:ADBE) is a tech company that operates through its Digital Media, Digital Experience, and Publishing & Advertising segments. It offers its solutions directly to enterprise customers through its sales force and local field offices, and directly to businesses and consumers. It also licenses its products to end-user customers through app stores and websites.
The company’s Digital Media segment includes Creative Cloud and Document Cloud, which together generated $4.23 billion in FQ1 2025, which was up 12% year-over-year. Digital Media’s annualized recurring revenue was also up 12.6%. This was driven by the growing subscription-based revenue stream within this segment. Other factors that contributed to this growth include Adobe Inc.’s (NASDAQ:ADBE) PDF software, the web and mobile versions of Acrobat also performed well, and Adobe Express.
The integration of GenAI features, such as Firefly, in Adobe Inc.’s (NASDAQ:ADBE) offerings, has been well-received by enterprise customers. For instance, the AI Assistant in Acrobat helps users with tasks like summarizing and editing PDFs. The web and mobile versions of core applications in Creative Cloud, like Photoshop and Illustrator, also had their paid subscriptions grow 35% year-over-year.
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 5th on our list of NASDAQ stocks with the highest upside potential. 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. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. 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.
