Adobe (ADBE) offers an attractive risk/reward to the long-term thesis despite near-term risks around the freemium model transition that involves offering free tiers of artificial intelligence tools to drive adoption, RBC Capital Markets said in a research note emailed Thursday.

Key positives from Q2 results revolved around over $500 million of AI-first annual recurring revenue along with an acceleration of traffic and intent-based spending, but dynamic user expectations with the traffic flowing into a freemium model will take time to monetize, analysts wrote.

GenAI attribution and performance measurement remains a priority for Adobe as it will likely help establish the enterprise total addressable market for creative, according to the note.

The brokerage said it reiterated its outperform rating on the stock and price target of $285 per share.

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