Adobe’s Strong Q2 Performance and AI-Driven Growth Justify Buy Rating and Increased Price Target

Analyst Gil Luria of D.A. Davidson maintained a Buy rating on Adobe (ADBE – Research Report), boosting the price target to $500.00.

Gil Luria has given his Buy rating due to a combination of factors that highlight Adobe’s strong performance and future potential. Adobe’s financial results for the second quarter of fiscal year 2025 exceeded expectations, with total revenue surpassing consensus estimates and the top end of guidance. This positive performance was driven by favorable new user trends and increased product usage, particularly in AI offerings which are outperforming internal expectations and contributing significantly to revenue growth.
Furthermore, Adobe’s management has raised its fiscal year 2025 revenue outlook, indicating confidence in continued growth, especially within the digital media segment. The company also demonstrated strong financial health with higher-than-expected operating margins and earnings per share. Additionally, Adobe’s active share repurchase program and substantial cash reserves further support the company’s financial stability and strategic growth initiatives. These factors, combined with the long-term benefits anticipated from AI integration across Adobe’s product portfolio, underpin Gil Luria’s Buy rating and the increased price target from $450 to $500.

In another report released today, Evercore ISI also maintained a Buy rating on the stock with a $475.00 price target.

Based on the recent corporate insider activity of 97 insiders, corporate insider sentiment is neutral on the stock.