10:43 AM EDT, 06/13/2025 (MT Newswires) -- Adobe's (ADBE) artificial intelligence optionality is "very much intact," BofA Securities said in a Thursday note, recommending that investors be more patient for improving growth given the stock's "current low valuation."

The company's Digital Media annual recurring revenue growth in fiscal Q2 of 12.1% exceeded the outlook of 11%, and much of its strength came from Document Cloud, BofA analysts said. Document Cloud is "leading the way" with AI monetization, they said.

Adobe raised its fiscal 2026 revenue target by $125 million, implying a "more resilient, diversified business, and good execution on growth initiatives," the analysts said. Despite the Q2 upside, the company did not increase its fiscal 2026 margin target of 46%, suggesting that investment cycles are in place for AI and top of funnel initiatives, they said.

BofA Securities reiterated the company's stock rating at buy and increased the price target to $475 from $424.

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