Wall Street: Adobe shares soar 16% on higher annual revenue forecast

Wall Street: Adobe shares soar 16% on higher annual revenue forecast/Reuters

MINT | June 14, 2024 | 11:04 PM IST | Breaking News | Follow on Google News

Wall Street: Adobe shares soar 16% on higher annual revenue forecast

Wall Street: Adobe shares soar 16% on higher annual revenue forecast

Adobe shares soared 16 per cent on Friday after the company raised its annual revenue forecast on higher demand for its artificial intelligence-powered software.

At 12:24 pm EDT, Adobe shares were  at $525.44, higher by $66.70, or 14.54 per cent on the tech-heavy Nasdaq.

At $528.81, the Photoshop-maker’s share price touched its highest level since March 14.

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Earnings and forecast

The company reported its second quarter earnings on Thursday.

It raised the midpoint of its fiscal year 2024 revenue forecast to $21.45 billion, as compared to its prior forecast of $21.40 billion. 

Its total second quarter revenue stood at $5.31 billion, which include $3.91 billion of revenue from digital media business.

Adobe’s forecast allayed fears among investors that the company could lose customers to AI startups such as Dall-E maker OpenAI.

It also lifted its forecast for full year adjusted earnings per share to a range of $18 and $18.20 per share from $17.60 and $18 per share it forecast earlier. 

The company said it earned $4.48 per share on an adjusted basis in the second quarter. 

Adobe has developed its own AI image generation tool called Firefly.

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The San Jose, California-based company had said in April that it plans to incorporate an AI tool to generate images in its popular Photoshop software.

Adobe’s chief executive officer (CEO) Shantanu Narayen said that Firefly has been integrated into products such as Photoshop and Illustrator while the company is working on developing similar technology for its video-editing software, Premiere. The AI model has been used to generate over 9 billion images.

Adobe expects an acceleration in new creative business through the rest of the fiscal year, its chief financial officer (CFO) Dan Durn said. 

MINT