Mizuho analysts called Adobe Systems (NASDAQ:) a “true AI winner” in a new note Friday. Analysts highlighted the underappreciated potential of Adobe’s artificial intelligence technology and the potential for significant growth in the future.
“Personally, I like this controversial positive message,” the analysts enthused in the report. They see Adobe’s current lack of popularity as an advantage, with significant potential for new investment. “Skepticism remains extremely high and there could be a lot of new money coming into the stock over the next 6-12 months if our bullish thesis holds up,” they add.
Mizuho’s report details how Adobe can benefit from artificial intelligence through its existing products and pricing strategies. While Firefly, Adobe’s core creative AI engine, is well known, analysts highlight a broader range of AI offerings. These offers can not only attract new users, but also encourage existing customers to switch to Adobe’s extensive creative suite.
Mizuho points to the recent “much-needed improvement and improvement in core net ARR in the second and third quarter” as a catalyst for renewed investor interest.
The firm recommends further Adobe research for investors looking for “contrary longs that are still hated and undervalued” with “modest downside risk.” Mizuho maintains a Buy rating and $640 target price for ADBE.