Adobe Inc. (ADBE): Among Ken Fisher's Technology Stock Picks with Huge Upside Potential

We recently published an article titled Billionaire Ken Fisher's 10 Technology Stock Picks with Huge Upside Potential. In this article, we are going to take a look at where Adobe Inc. (NASDAQ:ADBE) stands against the other technology stocks.

Technology stocks have faced heightened volatility in 2025, with market sentiment swinging sharply in response to President Donald Trump’s aggressive trade policies. On April 3, tech shares endured their worst day since the COVID-19 pandemic as Trump announced sweeping tariffs on all imported goods, including a 34% duty on Chinese imports, exacerbating fears of a global trade war. An iPhone maker led the steep declines among the "Magnificent Seven," plummeting over 9% due to its reliance on Chinese manufacturing. Other tech giants also fell between 8% and 9%, while semiconductor and PC companies recorded double-digit losses. The tech-heavy NASDAQ tumbled 6%, marking its worst session over five years and deepening its year-to-date loss to more than 14%.

Despite the recent turmoil, broader optimism about technology and growth stocks remains underpinned by longer-term trends. Notably, Ken Fisher of Fisher Asset Management has emphasized that while mega-cap tech firms often face headwinds, they tend to outperform during bullish cycles and reflect broader market confidence. He argues that 2024’s rally was more expansive than many recognize, with tech and communication services stocks leading growth across the board. While tech stocks often decline more in bearish periods, their historical track record of resilience and growth during recoveries continues to make them attractive for long-term investors. This underscores why, even amid significant volatility, tech stocks retain strategic value for portfolios, particularly when the market regains momentum.

Signs of a potential rebound appeared later in April, as major indexes recovered modestly on April 24, with tech shares helping lead the rally. Investors responded positively to reports that the U.S. and China had resumed trade talks, despite earlier denials from Beijing. Trump’s announcement that some tariffs might be rolled back helped ease immediate fears, although uncertainty remains high. Analysts noted that the recent tech selloff had left the market oversold, setting the stage for short-term gains. However, mixed earnings reports and rising costs across industries continue to fuel caution, reinforcing the unpredictable nature of trade policy’s impact on tech and broader equity markets.

Our Methodology

For this article, we scanned Fisher Asset Management’s Q4 2024 13F filings to identify billionaire Ken Fisher's technology stock picks with the highest upside potential. We compiled the tech equities with upside potential higher than 27% at the time of writing this article and discussed why they stood out as sound potential investments. Finally, we ranked the stocks based on the ascending order of their upside potential. To assist readers with more context, we mentioned the hedge fund sentiment around each stock using data from 1,009 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.

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 363.5% since May 2014, beating its benchmark by 208 percentage points (see more details here).

Adobe Inc. (NASDAQ:ADBE)

Number of Hedge Fund Holders as of Q4: 117

Fisher Asset Management’s Equity Stake: $2.15 Billion 

Upside Potential as of April 30: 36.99%

Adobe Inc. (NASDAQ:ADBE) is a prominent American software company headquartered in San Jose, California. Renowned for its diverse portfolio of creative and digital solutions, Adobe offers a wide range of software tools for photo and video editing, vector graphics, web and print design, animation, mobile app development, and audio production. The company continues to set industry standards with its Creative Cloud suite, while also pushing boundaries in artificial intelligence and generative media.

For the first quarter of fiscal year 2025, Adobe Inc. (NASDAQ:ADBE) delivered record-breaking results, achieving revenue of $5.71 billion, a 10% year-over-year increase. The company reported GAAP diluted earnings per share of $4.14 and while operating income reached $2.16 billion. Net income was $1.81 billion. Adobe also reported strong cash flows from operations totaling $2.48 billion, and closed the quarter with Remaining Performance Obligations (RPO) of $19.69 billion, with Current RPO (cRPO) representing 67%. Additionally, the company repurchased approximately 7 million shares during the quarter, highlighting its ongoing commitment to returning value to shareholders.

Adobe Inc. (NASDAQ:ADBE) also made major strides in the field of generative AI with the launch of several new tools and upgrades to its Firefly platform. The company introduced the Firefly Image Model 4, which offers improvements in image quality, speed, and creative control, including camera angles, zoom, and stylistic precision. The model can generate high-resolution images up to 2K and has a more advanced variant, Image Model 4 Ultra, capable of rendering intricate scenes with detailed structures. These advancements are a result of significantly increased computational training, allowing for more nuanced and stylistically accurate image generation. Adobe’s generative capabilities are further enhanced by its Firefly Video Model, now publicly available after a limited beta. This tool enables users to generate 1080p video clips from text or images, customize motion elements, and manipulate shot composition and atmospheric details.

With strong financials, innovative AI tools, and strategic investments in content authenticity and generative technology, Adobe is well-positioned to maintain its leadership in creative software while expanding its influence in the rapidly evolving AI landscape. It currently has an upside potential of 36.99%, making it sixth on the list of billionaire Ken Fisher’s technology stock picks with huge upside potential.

Aristotle Value Equity Strategy stated the following regarding Adobe Inc. (NASDAQ:ADBE) in its Q1 2025 investor letter:

“Adobe Inc. (NASDAQ:ADBE), the leading provider of content creation and publishing software, was a notable detractor during the quarter. This came despite the company reporting record revenue of over $5.7 billion in the first quarter—a 10% year-over-year increase, with double-digit increases across both its Digital Media and Digital Experience segments. The disconnect between strong fundamentals and share price weakness reflects ongoing market concerns around intensifying competitive threats from generative AI and lower-cost design platforms. Market sentiment has remained cautious around the perceived disruption risk posed by new AI-driven entrants, including OpenAI’s Sora for video generation and platforms like Canva, which cater to the broader prosumer and small and medium-sized business segment. However, we continue to view these as largely non-overlapping with Adobe’s core base of creative professionals, enterprises and agencies—audiences that demand precision, control and integration within larger workflows. Canva, while expanding its feature set, remains limited in its enterprise readiness and depth. Sora, meanwhile, remains early-stage and experimental, with limited commercial application at this point. Crucially, Adobe is not standing still. The company is actively embedding generative AI across its ecosystem through Firefly, which is commercially safe (i.e., free of copyrighted sources to train its models) and integrated natively into Creative Cloud applications like Photoshop and Illustrator. Firefly has shown strong early traction, generating $125 million in annualized recurring revenue, with management expecting that figure to double by year end. While modest in size relative to Adobe’s total revenue, Firefly’s monetization strategy is still in its early innings, with further potential through upselling, usage-based pricing and expanded use cases. Beyond monetization, AI integration enhances Adobe’s long-term competitive moat through product functionality, stronger customer engagement and increased switching costs. Adobe’s unique access to proprietary data, content workflows and creative content allows it to fine-tune models that serve the high-end needs of professionals—capabilities that generic AI models lack. Strategic partnerships with Microsoft (e.g., Firefly in Microsoft 365 Copilot) and ongoing momentum in Adobe Express further extend its reach into new user segments. Ultimately, we believe Adobe has a durable competitive advantage, underpinned by a large installed base, subscription-led business model, strong brand equity and a long track record of innovation. While short-term concerns over AI disruption have weighed on the stock price, we believe Adobe is well-positioned to harness AI as a driver of value rather than being displaced by it.”

Overall ADBE ranks 6th among billionaire Ken Fisher’s technology stock picks with huge upside potential. While we acknowledge the potential of ADBE as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. 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 this cheapest AI stock.

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