Mizuho analysts described Adobe Systems (NASDAQ:) as a “true AI winner” in a new note on Friday. Analysts highlighted the underappreciated potential of Adobe's AI technology and the opportunity for significant future gains.
“I personally like this contrarian positive call,” the analysts enthused in the report. They find that Adobe's current lack of popularity is an advantage, suggesting great potential for new investments. “Uncertainty remains very high and there is a lot of potential new money coming into stocks over the next 6 to 12 months if our bullish thesis comes true,” they add.
Mizuho's report details how Adobe can leverage AI through its existing products and pricing strategies. Although Firefly, Adobe's core creative AI engine, is well known, analysts emphasize a broader range of AI offerings. Not only can these offers attract new users, but they can also encourage existing customers to upgrade within Adobe's comprehensive creative suite.
Mizuho points to Adobe's “much-needed recent outperformance and increased core net new ARR metric in Q2/Q3” as a catalyst for renewed investor interest.
The company recommends further research on Adobe for investors looking for a “quite contrarian buy that remains unpopular and unpopular” with “modest downside risk.” Mizuho maintains a Buy rating and $640 price target on ADBE.