Adobe stock hasn't gotten a boost from the company's early artificial intelligence initiatives. But a top company executive said Adobe is focused on the long term with AI and driving productivity gains for its customers.
"It's not a quick hit from a financial pop in performance," Adobe Chief Financial Officer Dan Durn told Investor's Business Daily. Instead, Adobe is taking a long-term perspective, he said.
That means adding AI capabilities to Adobe's existing products and introducing "AI-first" products when appropriate, he said.
Where Adobe stands out is its attention to the established workflows of its customers in the creative, marketing and enterprise fields, Durn said. It is focused on the interface layer for AI. That means integrating AI capabilities in a seamless way into workflows.
"Interfaces are where the magic of this technology is brought to life to yield real productivity gains for customers," Durn said.
Adobe exited its fiscal first quarter with more than $125 million in annualized recurring revenue from its "AI-first products," such as Firefly and Acrobat AI Assistant. That figure was zero four quarters ago, Durn said. And Adobe is looking to double that ARR in the next three quarters, he said.
Further, Adobe has over $3.5 billion in ARR that is "AI influenced," he said. That covers existing Adobe products that have AI capabilities, such as Photoshop.
Durn expressed confidence in Adobe's prospects for the rest of the year.
"We had a great Q1," he said. "And that strong performance in Q1 sets us up for a strong 2025."
Analysts Split On Adobe Stock
Adobe this week held its Adobe Summit conference in Las Vegas. At the show, it introduced agentic AI applications in its marketing software platform along with expanded generative AI tools.
Jefferies analyst Brent Thill on Friday reiterated his buy rating on Adobe stock with a price target of 650.
On the stock market today, Adobe stock slid 0.6% to close at 387.26.
In a client note, Thill said his checks with partners and customers at the Adobe Summit were encouraging.
Elsewhere, Deutsche Bank analyst Brad Zelnick maintained his hold rating on Adobe stock with a price target of 475 after the Adobe Summit.
"What we saw/heard reinforces our view of Adobe's leadership at the intersection of creativity and marketing, though also has us appreciating it may take some time to see an inflection in the financials," Zelnick said in a report Friday.
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