In an interview conducted on Thursday, Adobe Inc. (NASDAQ: ADBE), chief executive Shantanu Narayan responded to criticisms that the company was slow when it came to AI monetisation.
He said that the focus was shifted to monetisation after prioritising innovation and adoption.
Adobe’s chief executive is confident in the continued growth of Adobe as it continues to focus on AI.
Adobe shares are down approximately 6.0% at premarket despite the fact that Adobe reported earnings better than expected for its first fiscal quarter yesterday.
Adobe’s AI-based monetisation advances
Shantanu Nairayan stated that Adobe’s products already incorporate artificial intelligence.
He said that the company, based in San Jose in California, started by offering free services to prioritize adoption. This has resulted in “billions in revenue” in terms of acquisition and retention of customers.
Adobe’s AI standalone, which includes Acrobat AI Assistant and GenStudio as well as Firefly Services, had “over $125,000,000 in bookings” at the end of Q1.
The Nasdaq-listed company expects that this number will double by 2025.
The chief executive of CNBC’s e-commerce platform, speaking with CNBC, today downplayed any potential tariff impact, saying that what matters more is to “keep innovating” and “attract new users.”
Adobe’s stock has fallen about 12% from its high for the year.
Adobe issues muted guidance on its Q1 fiscal year
Investors are more interested in Adobe Inc’s current guidance than the CEO Narayan.
Adobe’s revenue is expected to drop between $5.77 and $5.82 Billion in the second quarter of its fiscal year, which falls in line with analyst forecast.
The management also missed the expectations for earnings of $3.91 per share. Adobe’s stock has taken a big hit Thursday morning.
ADBE does not pay out a dividend at the moment to help investors digest this softening of guidance.
Today, analysts have lowered their price targets for Adobe.
Stifel analyst J. Parker Lane says Adobe’s AI plans are not likely to be successful based on its guidance.
In a Thursday research note, he said that “Sentiment is still skewed negative” about Adobe’s ability to benefit from GenAI in the short term.
The analyst also lowered the price target for ADBE to $525 following the announcement of earnings. The analyst’s revised downward price target still indicates a potential upside of more than 20% from the current level.
It’s worth noting that Stifel was not the only firm to lower its Adobe price target after earnings. Oppenheimer slashed AI’s stock price to $530 last Thursday.
The post Adobe CEO defends AI, denies claims of slow monetisation could be updated as new information becomes available.
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