Wall Street Analysts Can’t Stop Talking About These 10 AI Stocks

4. Adobe Inc (NASDAQ:ADBE)

Number of Hedge Fund Investors: 123

Charlie Miner from Third Bridge recently explained on Schwab Network the core problems faced by Adobe.

“What Adobe Inc (NASDAQ:ADBE) is really struggling with right now is the lack of a growth catalyst. You can go back to the fall of 2022 when they proposed a $20 billion acquisition of Figma. They knew their core business, the digital media segment, was slowing in growth. Because that deal fell through and with the development of generative AI, Adobe is now looking to AI for Firefly as that catalyst.

The problem is Adobe’s approach has been adopt-now, monetize-later. Given the resources and the money they’re putting into this, investors are becoming increasingly frustrated that they’re not pulling that monetization lever. What we’re wondering is, despite customers telling me and others that the products are good and that they’re using them, how much are they actually going to pay for them? And how significant of a revenue driver is this going to be in 2025?”

Adobe Inc (NASDAQ:ADBE) has become a complex case for analysts who are still gauging whether Adobe would be a net beneficiary of the AI boom or a loser. On the one hand, Adobe Inc (NASDAQ:ADBE) is under threat with tons of AI tools good enough to make beginner-level designs, posts and videos for individuals or companies with low or no marketing budget. But on the other hand, the company is launching several AI-powered tools and integrating generative AI tools in its products that could boost its revenue in the future.

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.”