Adobe rises as Morgan Stanley upgrades on increased confidence to monetize AI
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Adobe (NASDAQ:ADBE) shares rose more than 2% in pre-market trading on Monday as investment firm Morgan Stanley upgraded the enterprise software maker, citing increased confidence on its ability to monetize artificial intelligence.
Analyst Keith Weiss, who moved his rating on Adobe (ADBE) shares to overweight from equal-weight and boosted his per-share price target to $660 from $510, noted that the presence of generative AI is "accelerating" the creativity and growth in the company's Creative Cloud unit. 
"Importantly, GenAI products like Firefly coupled with enhancements to flagship applications renew our confidence in a robust product innovation engine at Adobe," Weiss wrote in an investor note.
"Supported by one of the strongest franchises in software, Adobe's Creative Cloud is well positioned to integrate Generative AI functionality into existing workflows of a broad base of subscribers, enabling stickier customer engagement and opportunity to monetize incremental productivity provided to users." 
Adobe (ADBE) unveiled its Firefly generative AI product, designed to make it easier to edit photos, in March.
Weiss also said that he sees Adobe (ADBE) returning to "mid to high teens" earnings per share growth over the next three years, while boosting his fiscal 2025 revenue estimate by roughly $2B.
Analysts are extremely bullish on Adobe (ADBE). It has a BUY rating from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates ADBE a STRONG BUY.
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