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Adobe shares soared 16% on Friday, putting the Photoshop-maker on track for its best day in more than four years, after the company raised its annual revenue forecast as more customers turned to its AI-powered editing tools.
The forecast allayed investor fears that Adobe, a major player in the market for editing tools for photos and videos, could lose customers to AI startups such as Dall-E maker OpenAI that allow users to generate images with simple text prompts, Reuters reported.
"Generative artificial intelligence adoption should help drive growth over the next several quarters," Morningstar analysts said in a note.
Results showed Adobe's AI efforts, including the Firefly image-generating software it rolled out last year, were paying off, with senior executive David Wadhwani saying existing users were moving to higher-priced plans to gain access to Firefly.
At $528.81, the company's shares hit their highest level since March 14, and if the gains hold, Adobe was set to add more than $30 billion to its market value.
Its shares have lost about 23% of their value this year, compared with a nearly 14% gain for the S&P 500 index.
The company raised the midpoint of its fiscal 2024 revenue forecast to $21.45 billion on Thursday, compared with its prior midpoint of $21.40 billion.
It reported $3.91 billion as revenue from its digital media business, which made up about 74% of its total second-quarter revenue of $5.31 billion. Analysts had expected total sales of $5.29 billion.
