Is Adobe Inc. (NASDAQ:ADBE) the Best NASDAQ Stock to Buy So Far in 2025?

We recently published a list of 13 Best NASDAQ Stocks to Buy So Far in 2025. In this article, we are going to take a look at where Adobe Inc. (NASDAQ:ADBE) stands against other NASDAQ stocks to buy in 2025.

On April 4, Wedbush analyst Dan Ives appeared on CNBC to discuss the potential impact of current tariffs and compared the situation to an economic armageddon. If the current tariffs remain in place, Ives thinks it would lead to a 15% to 20% demand reduction across the board. He thinks that investor anxiety is much higher considering how things were in the March 2020 COVID-19 crash earlier. The analyst thinks that investors should now focus on the likelihood of tariff adjustments from comments about negotiations, the impact on consumer-focused companies, and the potential for demand destruction. He even thinks that companies may refuse to provide guidance in the first-quarter earnings calls due to the persistent tariff uncertainty.

Ives thinks that a lot of tech companies will not be able to absorb high tariff increases and rather this cost will be passed on to the consumers which will lead to significant margin erosion and even potential sales declines. He indicated that tech stocks are currently pricing in a 10% to 15% cut to numbers. He suggests that investors should now look at companies with strong long-term potential as he believes earnings may normalize in 2025 and 2026. The analyst also addressed the defensive performance of defense contractors. While acknowledging the relative stability here, Ives cautioned that even these even such sectors are not immune to tariffs. He noted the significant foreign component, specifically 40% to 50% in some instances, in hardware and other sectors.

Our Methodology

We sifted through the financial media reports to compile a list of the top NASDAQ stocks to buy for 2025. We then selected the 13 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Adobe Inc. (NASDAQ:ADBE)

Number of Hedge Fund Holders: 117

Adobe Inc. (NASDAQ:ADBE) is a tech company that operates through 3 segments: Digital Media, Digital Experience, and Publishing and Advertising. The Digital Media segment helps create, publish, and promote content. The Digital Experience segment helps create, manage, and monetize customer experiences from analytics to commerce. The Publishing and Advertising segment offers e-learning solutions and Adobe Advertising offerings.

The company’s family of GenAI models is referred to as Firefly and it’s integrated across the company’s platforms for performing tasks like making videos from text prompts or just creating simple images. In FQ1 2025, the users generated more than 20 billion assets using Firefly. The Firefly application is also seeing strong user engagement with around 90% of pain users using it for video generation purposes. The company has since introduced several Firefly subscription plans (Standard, Pro, and Premium) to monetize this demand.

Adobe Inc.’s (NASDAQ:ADBE) AI-powered creative tools are rapidly being adopted, with Photoshop GenAI monthly users being around 35% while Lightroom GenAI users being at 30% in the company’s overall Creative Cloud segment. The company is now focused on making Firefly a unified platform for creative production. The enterprise adoption of Firefly services and Custom Models is also improving.

Polen Focus Growth Strategy stated the following regarding Adobe Inc. (NASDAQ:ADBE) in its Q3 2024 investor letter:

“We added to several existing positions in the quarter including Adobe Inc. (NASDAQ:ADBE), Workday, Shopify, MSCI, and Paycom Software. We feel Adobe is poised for re-accelerating revenue and earnings growth partially due to the monetization of its Firefly GenAI product embedded in its creative software.”

Overall, ADBE ranks 10th on our list of the best NASDAQ stocks to buy so far in 2025. While we acknowledge the growth potential of ADBE, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than ADBE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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