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• Adobe will publish its financial results on Thursday.
• Analysts expect that its revenue will come in at $4.87 billion.
• Investors will focus on the company’s AI products.

Adobe's (Nasdaq: ADBE) stock price has staged a strong recovery in the past few months as investments in Artificial Intelligence (AI) rose. The shares jumped to a high of $569, the highest level since December 2021. It has soared by more than 104% from the lowest level in 2022.
 

Adobe earnings preview

Adobe, like Nvidia, has been a key beneficiary of the ongoing theme of artificial intelligence. Most analysts believe that the company’s suite of products is important in the industry. For one, studies show that Adobe has a market share of over 60% in the application development industry.

Adobe has other advantages as an investment. It has sticky products that are used by thousands of people every day. Further, it is a leading player in the Software as a Service (SAAS) industry. It has low churn and a predictable business model.

The next key catalyst for the Adobe share price will be the company’s earnings scheduled for Thursday. Analysts believe that Adobe’s business did well in the first quarter as its revenue jumped to $4.8 billion. Its GAAP earnings per share was $2.82. 

Adobe’s business segments did well during the first quarter. Its Document Cloud revenue jumped by 14% to $569 million while its Digital Media segment had over $3.52 billion. The segment attained an ARR of $14.1 billion Digital Experience revenue rose by 12% to $1.2 billion.
 

Adobe MAX event ahead

Adobe is also returning money to its shareholders. It started a $1 billion share repurchase program and has $4.15 billion remaining from its $15 billion authorization. In all, Adobe has reduced its outstanding shares to 455 million.

For the second quarter, the company guided its revenue to be between $4.83 billion and $4.87 billion. I suspect that Adobe’s revenue and profits will be higher than guidance since the management tends to be highly conservative.

Still, while these results will move the Adobe stock price, investors will focus on the upcoming MAX conference in October. This will be an important event where the company will showcase its AI products. In a note, analysts at Wells Fargo said:

“Heading into the MAX conference, we expect the company to highlight several key areas, including: 1) GenAI – building upon existing Firefly capabilities, more broadly across the CC portfolio; 2) Express updates – a key component to expanding its potential user base and defending vs. Canva, w/partners suggesting more interest recently; and 3) content supply chain.”
 

Adobe stock price forecast

(Click on image to enlarge)

The daily chart shows that the ADBE stock price has been in a strong bullish trend in the past few months. It has soared above the 50-day and 100-day moving averages. The stock has formed an ascending channel shown in red. The shares remain above the important support at $452.57, the highest level on August 15th last year.

Therefore, there is a likelihood that the Adobe share price will likely remain in a bullish trend, with the next level to watch being at $600.

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