Adobe stock rose 15% after earnings, but challenges remain to surpass Apple by 2030.

From Nasdaq: 2024-06-17 04:40:00

Adobe’s (NASDAQ: ADBE) stock price rose 15% after exceeding earnings expectations. Despite a 12% year-to-date decline, its Q2 revenue reached $5.31 billion. Adobe’s AI tools failed to impress, impacting its stock. Can Adobe surpass Apple (NASDAQ: AAPL) by the decade’s end? Challenges lie ahead, including slower growth in key divisions.

Adobe’s digital media and digital experience divisions struggled in the past two years. Revenue growth slowed down to 10% in fiscal 2023. Adobe aims to boost sales with its AI platform Firefly, but results remain modest. Fiscal 2024 estimates predict revenue growth of 10%-11% and EPS growth of 12%-13%, signaling stabilization ahead.

At $525 per share, Adobe trades at 29 times forward earnings. Projected growth could lead to a stock price nearing $1,030 by fiscal 2030. However, catching up to Apple’s $3.3 trillion valuation seems unlikely. Challenges include industry competition, AI platform adoption, and an FTC investigation into subscription policies. Consider investing with caution.



Read more at Nasdaq: Will Adobe Be Worth More Than Apple by 2030?