Jul. 2 at 10:26 PM
Adobe shares rose Thursday after HSBC upgraded the stock to Buy from Hold, with analyst Stephen Bersey taking a contrarian stance on a company that has struggled amid concerns that AI-powered competitors would erode its market position. Despite Adobe beating earnings expectations in recent quarters, the stock has fallen 34% year to date.
Bersey argued the selloff has been excessive, noting there is no evidence that AI-native rivals have had a material impact on Adobe's business. He believes the market has become overly pessimistic about the company's prospects and that its strong product portfolio, large installed customer base, and continued AI integration position it to benefit rather than suffer from the shift toward generative AI.
The upgrade comes as investors continue to debate which software companies will emerge as long-term AI winners, with Adobe now viewed by HSBC as an attractive opportunity after its significant underperformance.
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