Adobe Stock Earnings Jump. AI pays off.

Shares of Adobe rose 14% on Friday morning following the report in pre-market trading.

The strong results are the latest in a series of AI-related growth events for investors this week. It started on Monday with Apple’s launch of its new artificial intelligence strategy, “Apple Intelligence,” which sent its stock price up nearly 9%. This was followed by upbeat earnings news from Oracle on Tuesday and Broadcom on Wednesday, with both companies providing upbeat earnings commentary tinged with artificial intelligence. It seems that Adobe’s strong report will further strengthen the bullish sentiment in artificial intelligence stocks.

“We are driving strong adoption, value and demand for our AI solutions across all customer segments and are already seeing early successes in monetizing new AI technologies across our Digital Media and Digital Experience businesses,” CEO Shantanu Narayen said in remarks prepared for the company’s quarterly conference call .

Annual recurring net revenue from new digital media – a closely monitored metric for Adobe – was $487 million, well above the company’s forecast of $440 million. The company ended the quarter with total digital media ARR of $16.25 billion.

Adjusted earnings were $4.48 per share, topping Adobe’s forecast of $4.35 to $4.40 per share and the Wall Street consensus of $4.39 per share. Under generally accepted accounting principles, Adobe earned $3.49 per share.

The company’s Digital Experience revenue was $1.33 billion, at the high end of Adobe’s guidance range of $1.31 billion to $1.33 billion. Digital media segment revenue was $3.91 billion, also topping the company’s own forecast of $3.87 billion to $3.9 billion and the Street consensus of $3.89 billion.

“It was great performance from top to bottom across the company,” Adobe CFO Dan Durn said in an interview Barron’s. “We had a great first half and we continue that momentum in the second half, driven by innovation across all of our clouds, bringing them to life with generative AI, delivering real productivity gains for our customers.”

Adobe declined only to provide specific metrics on the impact of its AI efforts to date on its financial results. Durn said the company will do so at some point, but added that it’s still early and that the company wants to “make this decision quite carefully.” He also noted that use of the company’s tools continues to grow, with nine billion images created using Firefly AI software to date, and more images were created in May than in any previous month.

Adobe forecast August quarter revenue of $5.33 billion to $5.38 billion, including $460 million in net digital media. The company reports Digital Media revenues of $3.95 billion to $3.98 billion and Digital Experience revenues of $1.325 billion to $1.345 billion. Adobe Projects adjusted earnings for the quarter from $4.50 to $4.55 per share.

The Wall Street consensus for the August quarter was for total revenues of $5.4 billion, with net new digital media ARR of $458.5 million, digital media revenues of $3.99 billion, Digital Experience revenues of $1.34 billion and adjusted earnings of $4.47 per share.

For the full fiscal year, Adobe will now report revenue of $21.4 billion to $21.5 billion, up from its previous forecast of $21.3 billion to $21.5 billion. The company forecasts net new digital media ARR for this year of $1.95 billion, up from $1.9 billion previously.

The company now reports adjusted earnings for the year of $18 to $18.20 per share, compared to the previous range of $17.60 to $18 per share.

Write to Eric J. Savitz at [email protected]