Adobe (ADBE) reported record quarterly revenue thanks to artificial intelligence, exceeding analysts’ expectations. In the fiscal third quarter, the company posted adjusted earnings of $5.31 per share on revenue of $5.99 billion, up 11% from last year and above forecasts by Visible Alpha.

CEO Shantanu Narayen noted that AI-driven income has already pushed the company beyond its “AI-first” targets for 2025. As a result, Adobe raised its full-year outlook, now expecting adjusted earnings of $20.80–$20.85 per share and revenue of $23.65–$23.7 billion, compared to its previous forecast of $20.50–$20.70 and $23.50–$23.6 billion.

Despite the positive report, shares are still down more than 20% year-to-date amid concerns about the company’s AI progress and rising competition. On Thursday, the stock closed just below $351, while the average analyst target tracked by Visible Alpha stands above $461, suggesting more than 30% upside. Most analysts recommend buying the stock.

However, even these forecasts reflect caution compared to past highs: in February 2024, Adobe’s shares traded above $600.