The US media software company Adobe has eased concerns about its prospects in the field of Artificial Intelligence (AI) with an optimistic outlook for the 2024 fiscal year. CEO Shantanu Narayen raised the forecast for adjusted earnings per share to $18 to $18.20, up from the previous estimate of $17.60 to $18, following a strong second quarter. The company also appears somewhat more confident at the lower end of the previous revenue range.

Adobe, known for its Photoshop software, is under pressure to compete against emerging competition from AI tools for media creation and editing. Advances in artificial intelligence have spawned numerous startups capable of generating image content. In response, Adobe has integrated AI features into its own software solutions and raised prices.

In the second quarter, Adobe achieved a revenue of 5.3 billion dollars, an increase of 10 percent compared to the previous year. Profit rose by over one fifth to 1.57 billion dollars. These results slightly exceeded analysts' expectations. The growth was mainly driven by Adobe's cloud software for editing images, videos, and documents, as well as online marketing.

The positive quarterly figures and the optimized outlook caused Adobe's stock to rise by 14.51 percent to $525.31 in NASDAQ trading. Analysts like Brent Thill from Jefferies emphasized that, after a disappointing first quarter, Adobe has now regained credibility. The cloud software is gaining momentum, and the new AI features are expected to further boost the business in the second fiscal half of the year.

JPMorgan Upgrades Adobe Stock from "Neutral" to "Overweight" and Raises Price Target from $570 to $580. Analyst Mark Murphy Expects Adobe to "Run Smoothly" Again. New Products and Higher Prices Provide Tailwind, and Generative AI is Bearing Fruit.

Other analysts also expressed positive views. Goldman Sachs set a target price of 640 US dollars, seeing improved growth prospects in the second half due to increasing momentum in generative AI. The analysis firm Evercore ISI issued a target price of 650 dollars with an "Outperform" rating and praised the longevity of Adobe's traditional creative business as well as the initial successes of Adobe's "Firefly" project, which offers generative AI for creatives. Morgan Stanley even believes the stock could reach a target price of 660 dollars.

Investors had previously doubted whether Adobe could sufficiently hold its ground against the new competition. Advances in AI have given rise to more startups capable of generating image content. In response, Adobe has equipped its software with AI features and raised prices.

In 2023, Adobe's stock had significantly increased, but this year it has performed rather weakly so far. With a price loss of almost a quarter by the end of main trading on Thursday, Adobe couldn't keep up with some other tech companies that benefited from the AI hype. The stock remains a good distance away from its record high of nearly $700 from November 2021.

The positively received quarterly figures of the software giant supported the well-performing European tech sector at least temporarily on Friday. The semiconductor company Broadcom had already excited investors with its numbers and outlook on Thursday.

Adobe raised its annual target for expected earnings per share adjusted for special effects following strong figures. The Californians are also somewhat more optimistic about revenue. In the second quarter, Adobe exceeded experts' revenue expectations with a record of $5.3 billion. Net profit increased by more than a fifth.