Adobe stock has surged 19% in a month due to AI focus, but faces stiff competition.

From Nasdaq: 2025-05-21 12:11:00

Adobe shares have surged 19% in a month due to its Gen AI focus and a pause in tariffs. However, stiff competition in the AI space poses challenges. Adobe’s AI business is smaller than Microsoft and Google’s. Adobe’s stock underperformed peers but outperformed Alphabet.

Adobe’s AI portfolio includes GenStudio and Firefly Services. New products like Firefly Video Model and After Effects are expected to boost growth. Adobe expects its AI book of business to double by fiscal 2025, with positive revenue guidance for various segments. However, estimates for fiscal 2025 show a decline.

Adobe’s stock is overvalued and below the 200-day moving average. With a Zacks Rank #4, investors are advised to avoid the stock for now. A semiconductor stock is recommended for growth potential in AI, machine learning, and IoT. Global semiconductor manufacturing is projected to reach $803 billion by 2028. Consider investing in strong chip stocks for future growth.



Read more at Nasdaq: Adobe Jumps 19% in a Month: Is There Any Momentum Left in the Stock?