Adobe Stock, Microsoft Stock Advance On Strategic Moves
Desktop software titans Adobe (ADBE) and Microsoft (MSFT) on Friday impressed Wall Street with their latest strategic moves. Adobe stock and Microsoft stock are trading in record high territory on the news.
Late Thursday, Adobe announced plans to buy Frame.io, a cloud-based video collaboration platform. Adobe expects the $1.275 billion deal to close in its fiscal fourth quarter.
Meanwhile, Microsoft on Thursday revealed a first-ever price increase for its Microsoft 365 and Office 365 commercial cloud product suites. The price hikes will go into effect on March 1, 2022, with list price increases ranging from 9% to 25%.
In midday trading on the stock market today, Adobe stock climbed 1.8%, near 649.15. Microsoft stock rose 2.3%, near 303.60.
Record Highs For Adobe Stock, Microsoft Stock
Earlier in the session Friday, Adobe stock notched an all-time high of 651.99. And Microsoft stock hit a record high 305.84.
San Jose, Calif.-based Adobe said the Frame.io acquisition will add workflow functionality to the video creation tools of its Creative Cloud service. Creative Cloud includes Premiere Pro and After Effects video-editing products.
Frame.io boasts over a million users of its software across media and entertainment companies, ad agencies and other firms.
Jefferies analyst Brent Thill praised Adobe’s acquisition in a note to clients Thursday. He reiterated his buy rating on Adobe stock with a price target of 750.
“We like this acquisition as it strengthens Adobe’s existing leadership in the video market, which is only exploding with more creation and consumption of video content for consumers, businesses, and other organizations,” Thill said.
On June 11, Adobe stock broke out of a 40-week consolidation period at a buy point of 536.98, according to IBD MarketSmith charts. The breakout occurred just before Adobe reported better-than-expected fiscal second-quarter results on June 17.
Price-Target Hikes For Microsoft Stock
At least three Wall Street analysts raised their targets on Microsoft stock after the company’s announcement of price increases.
Mizuho Securities analyst Gregg Moskowitz maintained his buy rating on Microsoft stock and upped his price target to 350 from 325.
“These price increases will be a significant financial positive for Microsoft over time, particularly for what is one of the company’s most important product areas,” he said in a note to clients. Those productivity software products account for nearly 20% of the company’s total revenue, he said.
Office 365 has over 300 million commercial paid seats and “growth remains remarkably healthy,” Moskowitz said.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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