Adobe (ADBE) Unveils Firefly, Boosts Generative AI Efforts

·3-min read

Adobe ADBE is leaving no stone unturned to innovate its cloud offerings by powering them with Artificial Intelligence (AI).

The latest introduction of the company’s new family of creative generative AI models, namely Adobe Firefly, attests to the aforesaid fact.

The new product enables content creators to use their words, images, audio, vectors, videos and 3D. Also, Firefly allows creators to use their creative ingredients like brushes, color gradients and video transformations.

Firefly helps creators make several changes to their content and create endless variations of their content seamlessly.

We note that Adobe Firefly, which bolsters image-generation capabilities, is part of the Adobe Experience Cloud offerings.

Adobe strives to integrate creative ingredients, backed by generative AI, directly into customers’ workflows with Firefly.

The company aims to deliver an enhanced user experience, while creating and modifying content using Creative Cloud, Document Cloud, Experience Cloud and Adobe Express workflows on the back of its latest move.

More precisely, Adobe plans to integrate Firefly into Adobe Express, Adobe Experience Manager, Adobe Photoshop and Adobe Illustrator. This, in turn, will boost the capabilities of these tools.

The Firefly introduction is expected to drive Adobe’s momentum among content creators and bolster the adoption rate of the above-mentioned tools.

Adobe Inc. Price and Consensus


Adobe Inc. Price and Consensus
Adobe Inc. Price and Consensus

Adobe Inc. price-consensus-chart | Adobe Inc. Quote

Generative AI Prospects

The latest move by the company bodes well for its growing efforts toward bolstering its presence in the booming generative AI space.

Adobe Firefly is part of the new Adobe Sensei generative AI series — Sensei GenAI, which the company introduced with the announcement of the former.

Sensei GenAI is designed to help marketers and other customer experience teams increase their productivity without increasing their workload.

With Firefly and Sensei GenAI, Adobe has positioned itself well to capitalize on the growth prospects of generative AI.

According to a report from The Brainy Insights, the market for generative AI is expected to reach $188.62 billion by 2032, seeing a CAGR of 36.1% between 2022 and 2032.

Per a Grand View Research report, the market is likely to hit $109.4 billion by 2030, witnessing a CAGR of 34.6% between 2022 and 2030.

We believe that Adobe’s growing prospects in this promising market will aid it in winning investors’ confidence in the near term.

Coming to the price performance, ADBE has lost 22.5% in a year compared with the industry’s decline of 8.8%.

Digital Experience Segment in Focus

We note that the above-mentioned endeavors have added strength to Adobe’s Experience Cloud offerings.

This, in turn, will likely aid the performance of the Digital Experience segment, which has become an integral part of the company.

In first-quarter fiscal 2023, the segment generated revenues of $1.18 billion, up 11% on a year-over-year basis. The Experience Cloud subscription revenues were $1.04 billion, which rose 12% from the year-ago quarter.

For second-quarter fiscal 2023, Adobe expects Digital Experience segment revenues between $1.21 and $1.23 billion. Also, subscription revenues of Digital Experience are anticipated to be $1.06-$1.08 billion.

Zacks Rank & Stocks to Consider

Currently, Adobe carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are Arista Networks ANET, Salesforce CRM and Analog Devices ADI. Arista Networks and Salesforce sport a Zacks Rank #1 (Strong Buy), and Analog Devices carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Arista Networks shares have gained 23.6% in the past year. The long-term earnings growth rate for ANET is projected at 14.17%.

Salesforce shares have lost 13.5% in the past year. CRM’s long-term earnings growth rate is projected at 16.75%.

Analog Devices shares have gained 14.3% in the past year. The long-term earnings growth rate for ADI is projected at 12.25%.

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