Adobe (NASDAQ:ADBE) stock is trending on social media and business news websites, and it is rallying about 15%. The software maker delivered beat-and-raise fiscal second-quarter results yesterday after the market closed. Adobe reported that its artificial intelligence (AI) innovations had enabled it to attract new customers.
While there’s no evidence that ADBE stock is becoming the next Nvidia (NASDAQ:NVDA), it’s clear that Adobe’s shares will be boosted significantly by AI for the foreseeable future.
Adobe’s Beat-and-Raise Results
The company reported Q2 earnings per share, excluding certain items, of $4.48, versus analysts’ average estimate of $4.39. Adobe’s revenue came in at $5.31 billion, slightly above the mean estimate of $5.29 billion. The firm’s top line increased 10% versus the same period a year earlier, while its operating income rose 16% year-over-year to $1.88 billion.
Turning to guidance, Adobe’s midpoint full-year revenue outlook rose to $21.45 billion from $21.4 billion.
AI Is Boosting Adobe
One of Adobe’s executives, David Wadhwani, reported that the demand for its AI-powered offerings, including its Firefly image-generating software, is lifting its financial results. Specifically, its current customers are paying more, on average, to access Firefly, while the software is also attracting new users.
“We’re driving strong usage, value, and demand for our AI solutions across all customer segments and seeing early success monetizing new AI technologies across our Digital Media and Digital Experience businesses,” CEO Shantanu Narayen said in a statement.
However, the firm declined to quantify AI’s impact on its business directly. CFO Dan Durn said that it would do so in the future, and the company noted that 9 billion images had been created so far with AI-powered Firefly. Additionally, more such images were made in May than in any previous month.
The Price Action of ADBE Stock
Heading into today, the shares had fallen 5% in the previous month, 20% in the preceding three months, and 23% in 2024.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
