Adobe Q2 FY11/23 Earnings Review
Growth accelerated, margins strong, all good on fundamentals. But is it a prudent buy right now?
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Repeat After Us - It’s An AI Stock Now. Got It? An AI Stock.
Adobe stock is on a tear right now. This is a function of (1) the stock having dumped hard and late in the 2022 bear market, so it has the traditional V-shaped recovery to put in, (2) investors getting over the shock of the proposed Figma acquisition, (3) the company managing to (dream)weave an AI narrative into its capital markets marketing narrative.
Medium term we think the stock can keep moving up. Short term, as with so many of the software names we cover, we think the stock is likely to sell off a little before another run higher. We put some metrics around that below.
Let's look at the numbers first, then the valuation multiples, then a longer-term chart (and rating), then the short-term chart.
As usual any questions reach out in chat or in comments to this note.