Adobe's Stock Surges Approximately 15% After Report Publication


On June 5th in the article "Is ADBE Stock Undervalued?", we highlighted several bullish signs, suggesting that the report published on June 13th could be a driver for a resumption of the uptrend.

Adobe's report released on June 13th proved to be strong:
→ Earnings per share: Actual = $4.48, Forecast = $4.39;
→ Revenue: Actual = $5.309 billion, Forecast = $5.291 billion. A 10% increase compared to the same quarter last year.

Furthermore, the company stated that:
→ AI is more of an advantage than a hindrance to business development;
→ “We’re seeing early success monetizing new AI technologies across our Digital Media and Digital Experience businesses,” said Shantanu Narayen, Adobe's CEO.

Technical analysis of Adobe's stock shows that:
→ The price has returned to an upward channel (shown in blue) starting from 2023;
→ The price broke a descending formation (shown with red lines), potentially marking a significant correction from point A to point B by approximately 50%;
→ The price surpassed the psychological mark of $500 per share;
→ The price is in the area of the bearish gap from March 15th, which may act as resistance.

Although the RSI indicator on the daily chart of Adobe's stock was in oversold territory at the end of May, today it indicates overbought conditions. There is a possibility that a correction may follow the sharp change in market sentiment, associated with a more thorough evaluation of Adobe's stock prospects.

In such a scenario, support for Adobe's stock price may come from:
→ The psychological level at $500;
→ The lower boundary of the channel;
→ Former resistance at $494.

According to TipRanks, the average price target for Adobe's stock is $613 in 12 months, indicating a growth potential of +16% from current levels.

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