Adobe's AI revenue, new subscription segments to drive long-term growth

** Photoshop maker Adobe Inc ADBE.O forecast second-quarter revenue in line with Wall Street expectations on Wednesday, as it grapples with slower monetization of its AI offerings while facing tough competition from startups

** Shares of ADBE down ~4.7% at $418.03 in premarket trading

AI PAVES THE WAY

** Wolfe Research ("outperform", PT: $575) believes co will succeed in AI and benefit from new subscription segments like business professionals, consumers and creative & marketing professionals, to create a "clearer narrative" moving forward

** TD Cowen ("hold", PT: $490) sees progress in co's GenAI revenue, but notes "it is still too small to move the needle on overall growth & we think primary focus is still on adoption vs. monetization"

** Morgan Stanley ("overweight", PT: $600) sees potential for growth in creative and marketing professionals with products like GenStudio and Firefly Services; adds longer sales cycles might slow near-term growth

** J.P.Morgan ("overweight", PT: $540) sees additional levers driving steady annual recurring revenue (ARR) growth long term, including pricing tailwinds, converting free-to-paid subscribers from its large user base and inorganic contributions