We recently published a list of 10 AI Stocks on Investors’ Radar In January 2025. In this article, we are going to take a look at where Adobe Inc (NASDAQ:ADBE) stands against other AI stocks on investors’ radar in January 2025.
Drew Pettit, U.S. equity strategist at Citi Research, said in a latest program on CNBC that he believes the AI growth story is still intact moving ahead in 2025. However, the analyst believes a lot of positive news is already “priced in.” He also mentioned the key areas that can benefit this year.
“I think the fundamental stories, at least for the pick-and-shovels names, continue. But where we think the trade is actually going to broaden out, and honestly, it has since mid-year, is into some of the users of AI. So, think about car companies that do autonomous driving or software companies putting that into their programs themselves, and even to some of the more cyclical names that, on the back end, can get some more productivity gains. So yes, the picks-and-shovels, the enablers of the trade, were attractive for the most part in 2024. We think AI continues to broaden out.”
The analyst said he has done some “reverse DCF work” and believes there are many companies that are mispriced and many that have the good news around them already priced in.
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For this article, we picked 10 AI stocks that analysts are talking about this month. With each company, 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).
Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Investors: 123
Ray Wang, Constellation Research principal analyst, recently explained on CNBC why he is bullish on Adobe Inc. (NASDAQ:ADBE) for 2025:
“We’re big on AI, but the question is, what are the AI derivatives? So, what are the second-order and third-order derivatives of AI? The second-order ones are looking at software companies that are taking advantage of AI because most customers can’t build it on their own. They’re going to want to consume it.”
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 6th on our list of AI stocks on investors’ radar in January 2025. 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.
