Adobe shares drop 13% on weak quarterly revenue guidance
Summary
Adobe shares fell 13% on Friday morning after the company reported first-quarter results that beat estimates but delivered a light quarterly revenue forecast. Adobe also recently launched a new artificial intelligence assistant for its Reader and Acrobat applications that can help users digest information from long PDF documents. Bank of America analysts, reiterating their buy rating of Adobe shares, lowered their price target for the stock to $640 from $700, expressing optimism about Firefly, the companys generative AI image creation tool. Its analysts wrote on Friday that they expect the stock to recover and "would be buying this dip because pricing is masking the underlying strength in Creative Cloud." "A smaller than expected beat in Digital Media Net New ARR likely increases investor concerns around competitive pressures," the analysts wrote.