What happened
These days, if someone breathes the magic words "artificial intelligence" (AI) at a stock, it can experience a nice price pop. So it was with veteran software company Adobe (ADBE 0.87%), which saw a more than 3% lift in its share price following an analyst upgrade on Monday. That change was made in no small part on the basis of vast potential with AI.
So what
Before market open that day, Keith Weiss of influential investment bank Morgan Stanley pushed up his recommendation on Adobe one peg to overweight (buy, in other words) from his previous equal weight (hold). In doing so he enacted a dramatic raise of his price target, cranking it $150 higher to $660 per share. If met, that level would be nearly 30% higher than the stock's current value.
In a new research note, Weiss wrote that for Adobe "a framework to size upside from Generative AI in the medium/long-term gets us back on board," with the latest buy rating.
The analyst believes that, anchored by one of the most solid franchises in the software business, Adobe could work AI capabilities into its Creative Cloud to add value to that service.
Now what
What a prognosticator writes or believes about a stock isn't its be-all and end-all, it's important to note. Yet Adobe has proven adept over the years at innovating its storied product lineup enough to keep customers sweet. Assuming it can harness AI functionalities just as effectively, it could really take advantage of the technology of the moment.
