Goldman Sachs analyst Kash Rangan has reaffirmed his "Buy" rating on Adobe (ADBE.US) with a target price of $570. Adobe previously reported strong third-quarter revenue, profit margins, and cash flow performance, along with moderate revenue guidance. While investors have questioned the sustainability of Adobe's double-digit growth, the analyst believes artificial intelligence serves as a key driver that can boost annual recurring revenue in the digital media business.

The analysts note that Adobe's AI-first annual recurring revenue has already surpassed its fiscal 2025 fourth-quarter target of $250 million ahead of schedule. If this growth momentum continues, the AI business is expected to stabilize and accelerate growth in 2026. This development could potentially unlock new revenue streams, enabling Adobe to market higher-end products. Overall, artificial intelligence is emerging as the primary force driving Adobe's long-term growth.

In summary, Goldman Sachs believes artificial intelligence is helping Adobe achieve an inflection point across its overall business, delivering more sustained compound growth over the long term. The firm also views the upcoming Adobe MAX conference and investor meeting (October 28) as potential catalysts, anticipating clearer insights into artificial intelligence initiatives and the company's broader long-term strategic framework.