Adobe Stock Soars 15% in 2025 After Impressive AI-Powered Earnings Beat – Key $535 Level to Watch

Major Highlights

• Adobe’s stock surged almost 15% in extended trading after the company reported Q2 2024 earnings that exceeded analyst expectations and boosted its full-year forecast, driven by strong adoption of its generative AI media solutions.
• Investors should watch the $535 price point, a key resistance near the 50% Fibonacci retracement, the 200-day moving average, and a consolidation zone from February.
• CEO Shantanu Narayen noted no significant economic changes impacting Adobe’s outlook during the earnings call.

Adobe Inc. (ADBE) experienced a significant after-hours rally, climbing nearly 15% following its Q2 2024 earnings release. The company beat Wall Street's expectations with adjusted earnings of $4.48 per share and revenue of $5.31 billion, supported by robust demand for its suite of AI-enhanced digital media products.

This article examines a critical technical level on Adobe’s stock chart and breaks down the latest earnings results.

Breakout from Bullish Falling Wedge Pattern

After forming a double top between December 2023 and February 2024, Adobe’s shares traded within a falling wedge—a bullish pattern signaling a potential upward breakout. Recently, buying interest increased near the wedge’s lower trendline with volume upticks leading into earnings.

Post-earnings, the stock is poised to test the $535 resistance level, where selling pressure may mount. This zone aligns with the 50% Fibonacci retracement, the descending 200-day moving average, and the February consolidation range, making it a pivotal area for traders.

Adobe’s shares rose to $526.43 in after-hours trading on the earnings announcement day.

Earnings and Revenue Surpass Estimates

For the quarter ending May 31, 2024, Adobe posted adjusted EPS of $4.48 versus the $4.39 expected by analysts. Revenue increased 10% year-over-year to $5.31 billion, eclipsing the $5.29 billion consensus.

The Digital Media segment, primarily Creative Cloud subscriptions, reported $487 million in net new annualized recurring revenue, significantly beating the anticipated $437.4 million. The surge reflects upgrades tied to Adobe's Firefly generative AI capabilities that enhance creative workflows.

"AI adoption and early monetization across Document Cloud and Creative Cloud, including flagship apps and Firefly services, continue to impress," said David Wadhwani, Adobe’s Digital Media president, during the earnings call.

Upgraded Full-Year Outlook Signals Confidence

Adobe raised its full-year guidance, projecting adjusted EPS between $18.00 and $18.20 (previously $17.60 to $18.00) and expected revenue of $21.40 to $21.50 billion, slightly improving the lower end by $100 million. Analysts had forecasted $18.02 EPS on $21.46 billion revenue.

Unlike some peers who trimmed forecasts amid economic uncertainty and softer AI interest, Adobe’s CEO Shantanu Narayen stated there were no noticeable economic shifts affecting the company’s outlook.

Note: The opinions and analysis presented on ZAMONA are for informational purposes only. Please review our warranty and liability disclaimer.

As of publication, the author holds no positions in the securities mentioned.

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