12 Best Tech Stocks to Invest In on the Dip

6. Adobe Inc. (NASDAQ:ADBE)

Number of Hedge Fund Holders: 86

Stock Upside: 30.32%

Year-To-Date Performance: -32.03%

Adobe Inc. (NASDAQ:ADBE) is one of the best tech stocks to invest in on the dip. On June 8, TD Cowen analyst Derrick Wood lowered his price target on Adobe Inc. (NASDAQ:ADBE) from $310 to $285 while keeping a Hold rating on the stock.

Wood said the cut was supported by a set of mixed but largely concerning data points he gathered ahead of Adobe’s earnings release on June 11. The analyst noted that the most worrying data point is a steady deceleration in third-party credit card data, which managed just 1.5% year over year growth in the most recent quarter. The growth had come in at about 3%, 4.5%, 4%, and 6% in the four quarters before. Adobe uses third-party credit card data as a proxy for real-world spending on its products.

On top of that spending slowdown, Wood noted that checks with Adobe’s channel partners and consultants painted a softer picture for three of the company’s key products. To the analyst, the feedback indicates that pricing tailwinds, which had previously helped Adobe grow revenue by charging more for upgraded plans, are now fading.

The analyst also flagged that customers are buying very few AI credits, which Adobe has been counting on to monetize its AI features. What this means is that the company’s strategy of using AI as a new revenue stream has yet to gain meaningful traction with its user base, said Wood.

Adobe Inc. (NASDAQ:ADBE) is a software company that provides digital media, digital experience, and creative productivity solutions. It operates primarily through Creative Cloud, Document Cloud, and Experience Cloud, through which it offers digital tools like Photoshop, Illustrator, and Acrobat.

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