The Nvidia (NVDA) artificial intelligence continues to create giant waves and new heights. Still, you won’t find NVDA stock on this month’s list of new buys by top mutual funds. But you will find it Adobe (ADBE) is amassing $1.3 billion worth of Adobe stock as competent money managers.
During 2023, the wave of artificial intelligence will drive demand across a wide range of industries. Both this month and last Adobe joined Microsoft (MSFT) shows where institutional investors have concentrated their money on this screen.
And Nvidia has been AWOL from the list since October.
But the latest IBD Breakout Stocks Index, updated weekly, features both Adobe and Nvidia. As Nvidia continues to hit record highs, Adobe stock is trying to make its all-time high.
Adobe also joins Nvidia and Microsoft in Magnificent Seven shares to get another sign of demand. A solid 88 A+ funds own shares of Adobe stock, while 221 funds with an A+ rating from IBD have a position in MSFT and 120 funds own a stake in NVDA.
See who’s joining Adobe Stock in the IBD Breakout Stocks Index
Adobe Stock Ties Nvidia Stock, Microsoft In This Key Metric
While Adobe doesn’t join Microsoft on the IBD Long-Term Leaders list, it actually has a better Earnings Stability Rating than its AI peer. Unlike the higher-better Composite Rating, the lower the Earnings Stability Rating, the more stable the earnings.
Adobe scores a strong 4, better than Microsoft’s 6. In comparison, Nvidia has a rating of 28.
Adobe Stock Creates a Point of Purchase – And a Test Site
While Microsoft reports earnings on January 30th and Nvidia on February 21st, Adobe doesn’t report its next performance until mid-March.
In its latest quarterly report on December 13, Adobe surpassed the $5 billion mark in sales, growing 12% year over year to $5.01 billion. The artificial intelligence leader posted earnings per share of $4.24, up 19% from the prior-year quarter.
Adobe shares are now targeting a buy point of 633.89, forming a flat base in the second phase. Earlier Wednesday, the generative AI firm broke above its 50-day moving average.
After a 3% gain on good volume on Friday, Adobe shares fell in even heavier trading on Monday. It now stands above three benchmarks: the 21-day line, the 50-day line and the 600 mark.
Meanwhile, Microsoft rose to the top of the buying list and Nvidia hit another all-time high.
Shaq and Sundance focus on Adobe and AI
Firmly established as a leader in marketing, analytics and creative tools, Adobe has combined it all to emerge as a powerhouse in generative artificial intelligence. Developing what it calls Generational AI, the Adobe Sensei platform provides AI for business.
With Adobe Sensei GenAI serving as the co-pilot, generative artificial intelligence aims to help clients reshape every aspect of their marketing initiatives. From planning to execution to analysis, Adobe helps partners deploy native AI technology to enhance their experiences and deliver more accurate and personalized customer journeys.
The AI leader will showcase innovations and what’s on the horizon at Adobe Summit 2024 in March. Using the stage name DJ DIESEL, NBA legend and entrepreneur Shaquille O’Neal is set to speak at an event featuring AI experts and other experts from around the world.
Earlier this month, ahead of the 2024 Sundance Film Festival, Adobe released major audio updates to its tools to help filmmakers improve their sound designs. The beta release includes AI-powered audio category tagging to automate dialogue, music, sound effects and environment identification and tagging.
IBD Breakout Opportunities ETF
The IBD Breakout Opportunities ETF (BOUT) from Innovator Capital Management tracks the IBD Breakout Stocks Index. As with other index ETFs, this fund allows you to invest in the entire index in addition to buying individual stocks. Learn more about the ETF and Innovator here.
Follow Matthew Gagani on Twitter @IBD_MGalgani.
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