BMO Capital analysts upgraded Adobe (NASDAQ:ADBE) to Outperform from Market Perform and increased their price target to $570.00 from $500.00, noting it believes the software company can attract new users through generative artificial intelligence (AI).

The analysts stated that the stock upgrade is based on the assumption that new users and price/mix will outweigh generative AI efficiency gains. The early availability of Firefly, a controlled beta version, has garnered interest from millions of users, including non-Creative Cloud users.

Positive feedback from BMO's Adobe Express survey further reinforces their bullish stance. The analysts predict new annual recurring revenue (ARR) to remain around $1.8 billion through fiscal 2024. Despite the recent stock price increase, the analysts see additional upside compared to other large-cap growth stocks.