Adobe’s shares jumped 14% before the market opened on Friday. This happened after the company, known for Photoshop, increased its annual revenue forecast, thanks to more customers using its AI-powered editing tools.
This new forecast eased investor concerns that Adobe, a key player in photo and video editing tools, might lose customers to AI startups like OpenAI, which creates image-generating software like Dall-E.
The forecast also indicated that Adobe’s AI initiatives, including its Firefly image-generating software introduced last year, are successful. Senior executive David Wadhwani mentioned that current users are upgrading to more expensive plans to access Firefly.
RBC Capital analysts noted that the wider availability of Firefly has led to increased engagement from both new and existing users.
If these premarket gains continue, Adobe’s market value will rise by about $30 billion. Currently, Adobe’s shares have dropped about 23% this year, while the S&P 500 index has gained nearly 14%.
On Friday, at least six brokerage firms increased their price targets for Adobe’s stock.
On Thursday, Adobe raised the midpoint of its fiscal 2024 revenue forecast to $21.45 billion, up from the previous midpoint of $21.40 billion.
Adobe reported $3.91 billion in revenue from its digital media business, which accounted for approximately 74% of its total second-quarter revenue of $5.31 billion. Analysts had anticipated total sales of $5.29 billion.