We recently published Jim Cramer’s 20 Bold AI Predictions – See How They Played Out! Adobe Inc. (NASDAQ:ADBE) is one of the stocks Jim Cramer recently discussed.
Adobe Inc. (NASDAQ:ADBE) is a productivity software firm whose shares have struggled as investors remain skeptical about its AI products. Year-to-date, the stock has lost 17.8%, and it is down by 13.70% since Cramer’s comments in January. Adobe Inc. (NASDAQ:ADBE)’s shares have struggled as the firm has failed to impress investors with its earnings, and analysts have turned bearish. For instance, Melius Research downgraded the stock to Sell in August, which led to a 2% drop in price. Cramer had warned in January that Adobe Inc. (NASDAQ:ADBE)’s AI products weren’t being well received by the market:
“Well I think that Adobe’s AI, I have to like Firefly very much. But this Canva product, I mean Canva is still, it’s so, the suite of Adobe products, it’s still, it’s so expensive. It’s fantastic. And any pro would never use a Canva. But when we, if Canva gets taken up in the design schools in this country, it will be existential for Adobe. Which is a fantastic company. So, be aware, they are the gold standard but people are not, people look for value everywhere now and they’re cutting back on anything. I think there are people who just say you know what this is just too expensive.”
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Cramer discussed the downgrade in detail as he commented in August:
“Alright, so, I’m going to have to just, sometimes you have to just say someone knows this better than I do. There’s a fellow by the name of Ben Reitzes… He has been coaching me, just saying, listen, understand that AI is eating software. This is a software-as-a-service company. In other words, when you buy them, when you buy Adobe, you get certain seats, you bring them in. It’s a very costly program. It is unbelievably good for graphics, okay? But there’s a new company called Figma that’s come in, and they do a lot of stuff that Adobe does for a little bit cheaper. There’s Canva, which does it for incredibly cheap. So I think that what’s really happened is, is that others have come into their market with a cheaper product that a lot of people feel is just as good, that has artificial intelligence in it, and they can’t maintain their price. So far, their price has been able to be maintained, but that’s the big worry about Adobe. And I have no answer for Adobe. None. I just don’t.”
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.
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Disclosure: None. This article is originally published at Insider Monkey.
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