Adobe (ADBE) delivered a beat-and-raise performance in its fiscal third-quarter earnings, raising optimism about its ability to grow and its AI strategy. Following the news, several analysts reiterated a Buy rating on the stock, while some also raised their price targets.
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AI Momentum Gains Speed
Analysts are impressed by Adobe’s accelerating AI-first annual recurring revenue (ARR). The company surpassed its $250 million AI-first ARR target one quarter early, with Goldman Sachs’ Kash Rangan noting this shows real momentum. If this trend continues, he believes it could not only stop the slowdown in Adobe’s core business but also spark new growth.
Oppenheimer’s Brian Schwartz echoed this sentiment, noting that AI-first ARR has doubled over the past six months, and the company posted its highest operating margin of the year. This shows that Adobe’s AI strategy is working and driving real business results.
However, he cautioned that single-digit growth in new Digital Media subscriptions and the Q4 revenue outlook could fuel concerns that ADBE’s overall growth might fall below 10% next year.
Barclays analyst Saket Kalia is confident in Adobe’s future, raising his price target to $465 and keeping a Buy rating. He noted that Adobe brought in $500 million in new subscription revenue, more than expected, and that its AI-powered revenue doubled in just two quarters. Kalia thinks the high demand for Adobe’s AI tools shows the company is likely to keep growing.
What’s Ahead for Adobe?
Looking ahead, analysts are awaiting the upcoming conference Adobe MAX and Investor Meeting on October 28, where the company is expected to provide deeper insight into its AI roadmap and long-term strategy. These events could serve as catalysts for further upside, especially if Adobe discloses its cross-sell strategies and upsell momentum across its product portfolio.
While Adobe’s Q3 beat and strong AI adoption are encouraging signs, investors are closely watching if the company can maintain double-digit growth.
Is Adobe Stock a Buy, Sell, or Hold?
Turning to Wall Street, Adobe stock has a Moderate Buy consensus rating based on 22 Buys, seven Holds, and two Sells assigned in the last three months. At $470.96, the average ADBE stock price target implies an upside potential of 34.86%.
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