NVIDIA, the leading artificial intelligence (AI) company, has been making significant strides and reaching new highs in the industry. However, it is surprising that the stock of NVIDIA (NVDA) is not among the new purchases made by the top mutual funds this month. Instead, these savvy money managers have turned their attention to Adobe (ADBE), scooping up a whopping $1.3 billion worth of Adobe stock.
Both Adobe and Microsoft (MSFT) have consistently attracted institutional investors throughout 2023, showcasing the high demand for AI across various industries. Interestingly, NVIDIA has been absent from the list since October.
Despite this, both Adobe and NVIDIA are featured in the latest IBD Breakout Stocks Index, which is updated weekly. While NVIDIA continues to set record highs, Adobe stock also aims to generate a breakout and achieve an all-time high.
Adobe’s presence alongside NVIDIA and Microsoft in garnering demand is notable, as 88 A+ rated funds hold shares of Adobe stock, compared to 120 funds with a stake in NVIDIA and 221 funds invested in Microsoft.
It is worth mentioning that although Adobe does not appear on the IBD Long-Term Leaders list alongside Microsoft, it has a better Earnings Stability Rating. The lower the rating, the more stable the earnings, and Adobe boasts a strong rating of 4, surpassing Microsoft’s rating of 6. In comparison, NVIDIA has a rating of 28.
In its latest quarterly report, Adobe achieved sales surpassing the $5 billion mark, with a 12% year-over-year gain to $5.01 billion. The company also demonstrated a 19% rise in earnings per share, reaching $4.24 compared to the prior-year quarter.
Currently, Adobe stock is in its second-stage flat base and targeting a buy point of 633.89. It is testing support at its 50-day moving average. While the stock experienced a 3% gain in good volume on Friday, it reversed lower on Monday with even heavier trade. However, it managed to hold both the 600 mark and its 50-day line on Tuesday.
Meanwhile, Microsoft remains within the buy range, and NVIDIA continues to trade around its all-time high.
Recognized as a leader in marketing, analytics, and creative tools, Adobe has combined all these aspects to become a prominent player in generative AI. Through its Adobe Sensei platform, the company offers AI for business, supporting clients in reshaping their marketing initiatives across all stages, from planning to execution to analysis. By deploying natively embedded AI technology, Adobe helps partners deliver accurate and personalized customer journeys.
The Adobe Summit 2024, scheduled for March, will provide a platform for the company to showcase its latest innovations. This event will feature AI experts and other industry leaders, including NBA legend and entrepreneur Shaquille O’Neal, who will be speaking under his stage name DJ DIESEL.
Recently, Adobe unveiled major audio updates to its tools ahead of the 2024 Sundance Film Festival. These updates include AI-powered audio category tagging that automates the identification and labeling of dialogue, music, sound effects, and ambience, offering enhanced sound design for filmmakers.
Investors interested in tracking the IBD Breakout Stocks Index can consider the IBD Breakout Opportunities ETF (BOUT) from Innovator Capital Management. This ETF allows investors to access the entire index rather than purchasing individual stocks.
Overall, while NVIDIA may be absent from the list of new purchases by top mutual funds, Adobe’s stock has caught the attention of savvy money managers. Adobe’s strong position in generative AI, stable earnings, and consistent growth make it an attractive investment option alongside tech giants like Microsoft and NVIDIA.
Incorporate any relevant hyperlinks or references from the provided articles throughout the text.
