Published - June 12th, 2023 @4:10 PM (CET)
Adobe's Stock Performance and Outlook
As we move beyond the first quarter earnings season, a few tech giants, including Adobe (NASDAQ:ADBE) among them, remain noteworthy. Having broken the 400 mark, the company's stock showed significant growth last month, building on a solid base since mid-August.
Adobe's AI Platform Firefly Amidst Market Volatility
Investors were shaken last Wednesday as software stocks, Adobe included, took a hard hit, with the company's shares dropping by 3.4%. However, Adobe's stock rebounded, maintaining above its 10-day moving average. The company unveiled Firefly, a new AI platform enabling users to create images from text descriptions, triggering a sharp rise in shares. The momentum continued on Friday, with Wells Fargo upgrading Adobe's stock to overweight and setting a new price target of 525. In addition, Mizuho increased Adobe's target price from 375 to 450.
Oracle's Market Performance
Oracle (NYSE:ORCL), another tech heavyweight, has demonstrated consistent strength following its late March breakout over a 91.22 entry. Oracle's stock has been performing well, supported by the 21-day exponential moving average. The company is expected to announce its earnings after the market closes on Monday, with Zacks consensus estimates predicting an adjusted profit of $1.58 per share, a 3% increase from last year. Revenue is projected to rise by 16% to $3.74 billion, building on 18% revenue growth for three consecutive quarters.
Adobe's Earnings Boost and Digital Media's Role
Due to favorable earnings reports, Adobe's stock has seen an influx of buyers. On March 16, the company disclosed a 13% rise in quarterly profits and a 9% revenue increase to $4.66 billion. The Digital Media segment, including Creative Cloud, was a significant contributor with $3.4 billion in revenue, up by 9%.
Adobe's Creative Cloud was the primary revenue source in fiscal 2022, generating $11.6 billion in annual recurring revenue.
Adobe's Expected Q2 Earnings
The company's earnings for the quarter ending in May will be announced after the market closes on Thursday. Expectations are for an adjusted profit increase of 13% to $3.78 per share and a 9% revenue rise to $4.76 billion.
Figma Acquisition: Adobe Under Review
Last September, Adobe revealed plans to acquire Figma, a competitor in the digital design space, for $20 billion. However, the deal is under regulatory scrutiny, with organisations such as the U.S. Department of Justice raising antitrust concerns.
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