RBC Sees Long-Term AI Monetization Upside for Adobe (ADBE), Keeps $480 PT

Adobe Inc. (NASDAQ:ADBE) is one of the Hot AI Stocks to Keep on Your Radar. On August 21, RBC Capital analyst Matthew Swanson reiterated an Outperform rating on the stock with a $480.00 price target. The firm remains bullish on the stock despite increasing competition in the creative tools market.

The firm acknowledges that a key area of investor concern has been the growing fragmentation in the creative market, especially in generative content creation tools.

Working with RBC Element, the firm’s in-house data science team, RBC has looked at the onging trends in the market and tracked metrics for products such as Express and GenStudio. The firm has concluded that the biggest opportunity lies in editing with AI instead of merely creating new content.

“All you need to know: Over the past two-years we’ve seen an uptick in the number of creative tools on the market particularly in terms of generative content creation. As the market has become more fragmented, we have worked with RBC Elements™, our in-house data science team, to try to get a snapshot of the current trends in the creative market. This has been a key area of debate for investors where concern has been around the intersection of GenAI and competition where management has looked at additional metrics around Express and GenStudio to help quantify performance. Recent changes including embedding competitive models within Firefly allows for customer choice and aligns with our view that the long-term wallet share opportunity revolves around generative editing more than creation. We continue to look towards both tiered pricing and potential consumption revenue from more compute intensive models for video, 3D and vector as key sentiment drivers for investors looking for visibility around GenAI monetization. New to the report is mobile data which is led by Leonardo AI followed by Canva with improved trends from Adobe. Maintain our OP rating and $480 PT.”

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