Why Is Adobe (ADBE) Stock Soaring Today

Jabin Bastian /
2023/06/08 12:24 pm EDT

What Happened:

Shares of creative software maker Adobe (NASDAQ:ADBE) jumped 5.33% in the morning session after the company announced a generative AI tool, Sensei GenAI, which will be integrated across its enterprise applications. Adobe said the Sensei GenAI services use multiple large language models (LLMs), including Microsoft Azure OpenAI Service and FLAN-T5, to help brands generate and modify text-based experiences. Adobe also unveiled Firefly for Enterprise, a new service that helps businesses create, edit and share brand content faster and cheaper. Since the beginning of 2023, the market has responded favorably to news of innovation in artificial intelligence, and more tech companies are embedding AI into their platforms and operations to drive better business efficiency. Whether Adobe's new innovations will be differentiated enough or provide enough customer value is to be seen, but the market's reaction shows optimism around these dynamics for now.

What is the market telling us:

Adobe's shares are quite volatile and over the last year have had 13 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.

Adobe is up 30.5% since the beginning of the year, and at $439.73 per share it is trading close to its 52-week high of $451.02 from August 2022. Investors who bought $1,000 worth of Adobe's shares five years ago would now be looking at an investment worth $1,750.

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