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Adobe (ADBE) Price Target Cut as TD Cowen Flags Slowing Spend and Weak AI Credit Demand

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.

Pixabay/Public Domain

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.

While we acknowledge the risk and potential of ADBE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ADBE and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: 8 Best Defensive Stocks to Buy Amid Geopolitical Tensions and 10 Best Forever Stocks to Buy According to Analysts.

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The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

A few years from now, you’ll wish you’d owned this stock.

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Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

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