Adobe shares rose 16% on Friday, its biggest day in more than four years, after the firm upped its annual revenue projection as more customers used its AI-powered editing capabilities
The forecast alleviated investor concerns that Adobe, a significant player in the photo and video editing tools market, could lose consumers to AI startups like OpenAI, manufacturer of Dall-E, which enables users to generate images with straightforward text prompts.
In a note, Morningstar analysts stated that adopting predictive artificial intelligence should contribute to growth in the coming quarters.
The results indicated that Adobe’s AI initiatives, including the Firefly image-generating software introduced last year, yielded positive results.
Senior executive David Wadhwani stated that users were upgrading to more expensive plans to access Firefly.
Adobe’s market value was expected to increase by over $30 billion if the gains hold, as the company’s shares reached their highest level since March 14 at $528.81.
Compared to the S&P 500 index, which has experienced a nearly 14% increase in value this year, its shares have lost approximately 23%.
On Thursday, the company increased the midpoint of its fiscal 2024 revenue forecast to $21.45 billion, up from its previous midpoint of $21.40 billion.
It reported $3.91 billion in revenue from its digital media division, which accounted for approximately 74% of its total second-quarter revenue of $5.31 billion.
Analysts anticipated that the total sales would amount to $5.29 billion.