11 Best Augmented Reality Stocks to Buy According to Hedge Funds

Page 5 of 10

6. Adobe, Inc. (NASDAQ:ADBE)

Number of Hedge Fund Holders: 117

Adobe Inc. (NASDAQ:ADBE) is a US-based global technology company that offers services, products, and solutions to fuel digital experiences and imagine, manage, optimize, and engage with content across surfaces. The company’s digital media segment, centered around Adobe Document Cloud and Adobe Creative Cloud, also offers platforms like Adobe Firefly, Adobe Express, Photoshop, and other tools for creative professionals and other consumers.

Adobe Inc.’s (NASDAQ:ADBE) approach to AR is integrated into its Creative Cloud platform, which employs tools like Adobe Aero. Aero is an all-in-one authoring and viewing platform that allows users to create creative interactive AR experiences without needing advanced coding skills. This makes the platform user-friendly and highly accessible. The company is working to improve the platform for intuitive storytelling, ranking it sixth on our list of the best augmented reality stocks to buy now.

On April 25, Keith Weiss, an analyst from Morgan Stanley, maintained a Buy rating on Adobe Inc. (NASDAQ:ADBE) with an unchanged price target of $510.00. The analyst supported this rating with the company’s growth potential and current valuation, saying that its innovative capabilities and pricing power are being underappreciated by investors. The market is skeptical, as seen in Adobe Inc.’s (NASDAQ:ADBE) low valuation.

However, Weiss opined that this undervaluation represents an attractive opportunity for long-term growth. He pointed out that the market is currently pricing in a slowdown in the company’s long-term earnings growth, estimating it to be around 8% per annum compared to Wall Street expectations of a 12% compound annual growth rate. The analyst argued that Adobe Inc.’s (NASDAQ:ADBE) potential for margin expansion and expedited pace of product innovation could support higher-than-expected growth. As a result, the current share price does not highlight the potential for mid-teens EPS growth, making Adobe Inc. (NASDAQ:ADBE) an attractive investment at the present.

Page 5 of 10