Goldman Sachs Value Stocks: 10 Stocks to Buy

Page 9 of 9

1. Adobe Inc. (NASDAQ:ADBE)

Fwd. P/E: 17.4

Value in Goldman Sachs’ Portfolio: $1.5 Billion

Number of Hedge Fund Holders: 104

Adobe Inc. (NASDAQ:ADBE) is one of the best value stocks in Goldman Sachs’ portfolio. The company is facing increasing scrutiny over the monetization of its generative AI capabilities, which have fallen short of the expectations of some analysts. Adobe’s investments in these capabilities were expected to boost its Digital Media ARR growth. However, the results have been slower than anticipated, as Adobe continues to prioritize broader adoption. Due to the slower monetization and lack of near-term catalysts, analysts from Morgan Stanley and Mizuho Securities downgraded the stock to Hold on September 24. Both of them trimmed their price target sharply to $450 from $520 previously.

On the positive side, on the same day, Evercore ISI analyst Kirk Materne reiterated his bullish stance with a Buy rating, with an unchanged price target of $450. The analyst had already lowered his price target from $475 in his earlier note on September 12, following the company’s Q3 FY 2025 results.

While the company’s results had exceeded most metrics, Materne believes Adobe’s valuation already factors in a lot of uncertainty and doubts over its long-term growth trajectory. However, he also argues that it will take time for investor sentiment to turn positive, and such a change will require the company to show results on its AI-led growth initiatives and address competitive risks.

Adobe Inc. (NASDAQ:ADBE) is a global leader in creative, document, and digital experience software, providing tools for content creation, design, marketing, analytics, and customer engagement.

While we acknowledge the potential of ADBE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than ADBE and that has 100x upside potential, check out our report about this cheapest AI stock.

READ NEXT: 14 Best Precious Metals Stocks to Buy Now and 11 Best Performing Data Center Stocks to Buy Now.

Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.

Page 9 of 9