Yahoo Finance Adobe shares rise after Wells Fargo lifts rating amid generative AI hopes
Investing.com -- Shares in Adobe (NASDAQ:ADBE) rose in premarket trading on Friday after analysts at Wells Fargo upgraded their rating of the software company, citing hope that generative artificial intelligence will prove to be a "tailwind" for the business.
In a note to clients, the Wells Fargo analysts raised their outlook for the stock to "overweight" from "equal weight" and moved their share price target for Adobe up to $525 from their prior level of $420.
The improved rating comes after Adobe unveiled Firefly, its AI offering catered to business users. The platform, which will be available via Google's AI chatbot Bard in the coming months, harnesses Adobe's database of stock photos and other publicly available content to help produce images from text-based prompts.
The Wells Fargo analysts argued that they believe Adobe's "trusted" status with its users will place it in a strong position to benefit from generative AI technology like Firefly.
"Reading Adobe's press releases or any Firefly-related media material, the most common point of emphasis centers on the platform's being built around trust, model ownership, abiding by copyright, etc," the analysts said. "Our discussions with industry experts on the topic consistently alluded to this not only being true, but acting as a meaningful differentiator in driving enterprise grade interest and adoption."
They added that Firefly will provide Adobe with a "much needed next act" as it faces macroeconomic concerns and pushback from antitrust regulators over its proposed $20 billion takeover of cloud-based design tool maker Figma.
Related Articles
Adobe shares rise after Wells Fargo lifts rating amid generative AI hopes
UiPath slips as Wells Fargo downgrades on rich valuation, AI threat
