Morgan Stanley Maintains Hold Rating on Adobe (ADBE) Stock

Adobe Inc. (NASDAQ:ADBE) is one of the Best Monopoly Stocks to Buy Now. On October 30, Keith Weiss, an analyst from Morgan Stanley, maintained a “Hold” rating on the company’s stock. The associated price target was increased from $333.26 to $450.00. The analyst’s rating is backed by a combination of factors related to the company’s current market positioning and strategic initiatives.

As per the analyst, Adobe Inc. (NASDAQ:ADBE) continues to make strides when it comes to creating an open and integrated platform, which can strengthen its position in the broader creative industry.

However, there are worries related to its ability to effectively monetize the AI capabilities, considering the increased competition. Adobe Inc. (NASDAQ:ADBE)’s strategy to include third-party models, along with its own offerings, has been regarded as a positive step towards mitigating the competitive risks and enhancing user experience.

Even though the company has an attractive risk/reward profile at the current valuation, visibility into the AI monetization and growth acceleration remains limited. This, together with the reporting transition, reflects a delay in the catalyst, added Weiss.

Diamond Hill Capital, an investment management company, released its Q3 2025 investor letter. Here is what the fund said:

“Though markets have continued rising throughout the year, we have continued finding individual companies whose prices we believe are not reflective of their long-term growth outlooks. Accordingly, we initiated four new positions in Q3, including Colgate-Palmolive, Berkshire Hathaway, Zoetis and Adobe Inc. (NASDAQ:ADBE).

Adobe is the market’s largest provider of creative content software and enjoys a sizeable moat. Design professionals in all verticals — graphic designers, video editors, web and mobile app creators, etc. — rely heavily on Adobe’s robust suite of tools. It also owns direct customer engagement software and the ubiquitous Adobe Acrobat platform, two assets we think are underappreciated by the market. Despite valid concerns about greater competition and AI disruption going forward, we think Adobe’s solution breadth and diversification, incumbency and strong positioning upmarket, as well as its ongoing willingness to innovate, should position it well to weather shifts in the competitive environment. We believe Adobe has the potential to generate solid fundamentals over the next several years relative to the share price at which we initiated a position.”

While we acknowledge the potential of ADBE as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.