Adobe: New AI Models Punctuate Analyst Day Featuring a Dizzying Array of Product Announcements
Wide-moat Adobe ADBE hosted its analyst day, which focused on innovation. With no new financial disclosures or an updated framework for guidance, we are maintaining our $510 fair value estimate and see shares as fairly valued after strong performance throughout 2023. Still, the company announced a bevy of new products and general releases of previously announced solutions, as well as previewing some pending innovations. From a product standpoint, we came away impressed. We think the company’s leadership position in serving the creative markets remains intact and we are incrementally confident in our long-term forecast.
Adobe announced new generative AI models, including Firefly Image 2, Firefly Vector, and Firefly Design. These models are all based on Adobe’s pillar of trust for digital rights, which continue to believe will be a magnet for enterprise users. Firefly Image 2 represents a leap forward in capabilities and resolution from the original version, which was just released in March 2023. Firefly Vector, as the name implies, is based on vector graphics and is appropriate for Adobe Illustrator, which we think will be a welcome addition to the portfolio. The company also previewed some pending generative AI models, including both video and audio which, in our opinion, were beyond impressive.
Adobe also announced the launch of more than 100 new features throughout its portfolio, many centering around generative AI. Firefly has also now been incorporated into Adobe Express. We think the addition of next-generation AI capabilities further cements the company’s leadership position.
The closest Adobe came to a financial update was to note it is investing in AI capabilities and product innovation, and that management believes the company can grow through adding new users, and expanding relationships through upselling and cross-selling, while still increasing operating margins. Given management’s track record, we are on board with its assessment.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.