Down 22%, Here's How Adobe Could Follow in Salesforce's Footsteps to Become a Strong Buy in 2025

Core Viewpoint - The tech sector is expected to outperform the S&P 500 again, driven by strong performances from Nvidia and Broadcom in semiconductors, while software companies like Salesforce and Adobe show contrasting results [1] Group 1: Salesforce Performance - Salesforce has emerged as a leader in enterprise software, capitalizing on AI opportunities, particularly through its new platform, Agentforce, which utilizes machine learning and natural language processing [4][6] - The company emphasized the term "agent" 136 times during its third-quarter earnings call, indicating strong focus on its AI initiatives, which investors view positively despite potential overpromising [5] - Agentforce, launched in October, is a usage-based service priced at $2 per conversation, representing a potential$2 billion opportunity if Salesforce achieves its goal of 1 billion AI agents by the end of fiscal 2026 [6] Group 2: Adobe Performance - Adobe reported a 10.8% year-over-year revenue growth for its fiscal fourth quarter but saw a significant sell-off of over 13% post-earnings announcement, indicating investor skepticism about its AI monetization strategy [8][9] - Despite similar growth rates to Salesforce, Adobe faces doubts regarding its ability to effectively monetize AI, contrasting with the strong investor confidence in Salesforce's AI-driven growth narrative [9] - Adobe's fiscal 2025 earnings guidance suggests a forward price-to-earnings ratio of 22.5, which is considered low for a high-margin company, indicating potential undervaluation despite recent sell-offs [12]