Billionaire Quants’ Two Sigma’s 10 Stock Picks with Huge Upside Potential

8. Adobe Inc. (NASDAQ:ADBE)

Two Sigma Advisors Stake Value: $395,320,520

Upside Potential as of May 8: 32.02%

Number of Hedge Fund Holders: 117

Adobe Inc. (NASDAQ:ADBE) is a global software company best known for creative and multimedia applications. Its product portfolio includes Photoshop, Illustrator, Acrobat, and Premiere Pro. The products serve creative professionals, marketers, and enterprises across design, document management, and digital experience segments.

Adobe Inc.’s (NASDAQ:ADBE) financials in Q1 FY25 point to a company that is doing well. Revenue came in at $5.7 billion, a 10% year-over-year increase, which surpassed estimates by approximately $50 million. The company’s Digital Media segment, which includes Creative Cloud and Document Cloud, grew by 12% to $4.25 billion, while Digital Experience revenue increased by 7% to $1.37 billion. Non-GAAP earnings per share came in at $5.08, beating analyst expectations by $0.11.

Adobe Inc. (NASDAQ:ADBE) has also established itself as a leader in the generative AI space. For instance, its Firefly platform has powered over 12 billion generations since its launch. CEO Shantanu Narayen emphasized during the earnings call that the company’s differentiated approach to AI combines proprietary models with enterprise-grade security and governance. As a result, Adobe (NASDAQ:ADBE) can capture demand across creative, document, and experience workflows. The integration of AI capabilities throughout its product portfolio, including text-to-image and text-to-video generation in Creative Cloud applications, has enhanced user productivity and driven subscription growth. Despite these strengths, RBC Capital analyst Matthew Swanson lowered the firm’s price target on Adobe (NASDAQ:ADBE) from $530 to $480 on April 14, 2025. Swanson cited peer multiple contractions, though he maintained an Outperform rating.