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Investing.com -- Analysts at Stifel and UBS said in notes on Wednesday that Adobe’s annual MAX user conference in Los Angeles underscored the company’s growing role as a central platform for creative artificial intelligence.
Stifel told investors that Adobe is solidifying itself “as the Creative OS for the coming years,” noting that generative AI “dominated the longer-than-normal, three-hour MAX keynote and following investor session.”
The firm believes adoption of generative AI in creative industries “is much further along than other industries,” with Adobe strengthening its positioning through “web and mobile developments” and partnerships with leading model providers.
Stifel maintained its Buy rating and $480 price target on the stock, saying it expects Adobe’s position as “the creative system of record for businesses to remain durable.”
UBS also highlighted Adobe’s focus on partnerships and AI feature expansion, including “the addition of more AI features throughout the suite (such as Firefly Video editor) and embedding Express into ChatGPT.”
However, it pointed to reduced transparency, noting that Adobe will “stop providing segment-level ARR disclosures after the quarter” and report only total ARR going forward.
However, UBS stated that “while any loss of disclosure is a negative, in fairness to Adobe, not all large-cap SaaS peers report ARR or revs at the segment level.’”
The bank added that AI workloads “carry more COGS and that GMs will trend down ‘by a few points’ over time,” though this should be offset by cost controls and efficiency gains.
It cited positive feedback from users who were “absolutely utilizing AI tools” but noted that revenue uplift from AI remains early-stage. UBS kept its Neutral rating and $375 price target on the stock.