Skip to Content
Morningstar

Adobe: New AI Models Punctuate Analyst Day Featuring a Dizzying Array of Product Announcements

In this photo illustration the American multinational computer multimedia and creativity software company Adobe logo seen displayed on a smartphone with an economic stock exchange index graph in the background.
Securities In This Article
Adobe Inc
(ADBE)

Wide-moat Adobe ADBE hosted its analyst day, which focused on innovation. With no new financial disclosures or an updated framework for guidance, we are maintaining our $510 fair value estimate and see shares as fairly valued after strong performance throughout 2023. Still, the company announced a bevy of new products and general releases of previously announced solutions, as well as previewing some pending innovations. From a product standpoint, we came away impressed. We think the company’s leadership position in serving the creative markets remains intact and we are incrementally confident in our long-term forecast.

Adobe announced new generative AI models, including Firefly Image 2, Firefly Vector, and Firefly Design. These models are all based on Adobe’s pillar of trust for digital rights, which continue to believe will be a magnet for enterprise users. Firefly Image 2 represents a leap forward in capabilities and resolution from the original version, which was just released in March 2023. Firefly Vector, as the name implies, is based on vector graphics and is appropriate for Adobe Illustrator, which we think will be a welcome addition to the portfolio. The company also previewed some pending generative AI models, including both video and audio which, in our opinion, were beyond impressive.

Adobe also announced the launch of more than 100 new features throughout its portfolio, many centering around generative AI. Firefly has also now been incorporated into Adobe Express. We think the addition of next-generation AI capabilities further cements the company’s leadership position.

The closest Adobe came to a financial update was to note it is investing in AI capabilities and product innovation, and that management believes the company can grow through adding new users, and expanding relationships through upselling and cross-selling, while still increasing operating margins. Given management’s track record, we are on board with its assessment.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

More in Stocks

About the Author

Dan Romanoff

Senior Equity Analyst
More from Author

Dan Romanoff, CPA, is a senior equity research analyst on the technology, media, and telecommunications team for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He covers software.

Before Joining Morningstar in 2019, Romanoff spent 12 years in buy-side equity research covering the technology and telecommunications sectors, most recently at Holland Capital Management. Prior to that, he spent five years in sell-side equity research as an associate analyst at UBS and a senior analyst at Credit Suisse covering various areas within technology, including hardware, software, and semiconductors. Romanoff also has worked as an auditor and in valuation services for major public accounting firms.

Romanoff holds a bachelor’s degree in accountancy and a Master of Business Administration in finance, both from the University of Illinois at Urbana-Champaign. He also holds the Certified Public Accountant and Accredited in Business Valuation designations.

Sponsor Center