If You'd Put $1,000 Into Adobe Stock 20 Years Ago, Here's What You'd Have Today
Adobe stock has outperformed the S&P 500 by leaps and bounds over the past two decades.
![Adobe stock](https://cdn.mos.cms.futurecdn.net/pAkN9K89ucAqHg7yUw5qzi-415-80.jpg)
![Dan Burrows](https://cdn.mos.cms.futurecdn.net/JGDa8CVTvRMNdmeQmxuD6f.jpg)
The promise of generative artificial intelligence has Adobe (ADBE) back to its market-beating ways, even if the stock has gotten off to a disappointing start in 2024.
After adding 77% in 2023, shares in the maker of application software for creative types are lagging the broader market through the first quarter of the new year. The company's May announcement that it was adding AI tools to Photoshop lit a second-half fire under Adobe stock. But then a pullback of some kind following such a torrid run isn't unusual for any name. Besides, two steps forward and one step back is sort of par for the course for ADBE stock.
And make no mistake: jumping on the AI bandwagon was just what Adobe needed. For years, the company enjoyed a near monopoly in its niche. Its Creative Suite – which includes the likes of Photoshop, Premiere Pro for video editing and Dreamweaver for website design, among others – really had no peer.
![https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-200-80.png](https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-320-80.png)
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
But times change. The emergence of Microsoft's (MSFT) Azure and other cloud-based competitors have taken a bite out of Creative Cloud. Adobe's suite of products still commands a market share of more than 60%, but there's no question the company – and its shareholders – have been feeling the heat.
Just look at how shares have slowed down over the past few years.
Adobe stock has outperformed the S&P 500 by a wide margin over the course of its life as a publicly traded company, generating an all-time total return of almost 24%. By comparison, the broader market returned 10.4% over the same span. ADBE stock also beat the S&P 500, usually handily, over the past 20-, 15-, 10- and five-year periods.
The early 2020s have been a different story entirely. A terrible 2022 has ABDE stock actually lagging the S&P 500 over the past three years by almost three percentage points.
Happily for shareholders, the AI feeding frenzy appears to have put shares back on track.
"The recent selloff in ADBE shares looks overdone and the stock is a good place for investors to be involved in over the next fiscal 12 months given there are numerous growth drivers ... favorable generative AI positioning and valuation support," writes Oppenheimer analyst Brian Schwartz, who has an Outperform (the equivalent of Buy) rating on ADBE.
The bottom line on Adobe stock
Adobe's hot 2023 run was a lot more like what longtime shareholders have come to expect from the stock. After all, anyone who plonked down just a thousand bucks into ADBE a couple of decades ago would have enjoyed truly outstanding returns.
Have a look at the chart below and you'll see that a $1,000 investment in Adobe stock 20 years ago would today be worth about $30,300. The same money invested in the broader market would theoretically have grown to almost $6,600.
True, Adobe stock remains about 20% below its all-time closing high set back in November 2021, but analysts think it can reclaim those levels eventually.
After all, Wall Street is pretty bullish on the name. Of the 31 analysts issuing opinions on Adobe stock surveyed by S&P Global Market Intelligence, 11 rate it at Strong Buy, 14 call it a Buy, 6 have it at Hold. That works out to a consensus recommendation of Buy, with high conviction.
More Stocks of the Past 20 Years
- If You'd Put $1,000 Into Nvidia Stock 20 Years Ago, Here's What You'd Have Today
- If You'd Put $1,000 Into Apple Stock 20 Years Ago, Here's What You'd Have Today
- If You'd Put $1,000 Into Amazon Stock 20 Years Ago, Here's What You'd Have Today
- If You'd Put $1,000 Into Microsoft Stock 20 Years Ago, Here's What You'd Have Today
![Dan Burrows](https://cdn.mos.cms.futurecdn.net/JGDa8CVTvRMNdmeQmxuD6f.jpg)
Dan Burrows is Kiplinger's senior investing writer, having joined the august publication full time in 2016.
A long-time financial journalist, Dan is a veteran of SmartMoney, MarketWatch, CBS MoneyWatch, InvestorPlace and DailyFinance. He has written for The Wall Street Journal, Bloomberg, Consumer Reports, Senior Executive and Boston magazine, and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among other publications. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities.
Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.
In his current role at Kiplinger, Dan writes about equities, fixed income, currencies, commodities, funds, macroeconomics, demographics, real estate, cost of living indexes and more.
Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.
Disclosure: Dan does not trade stocks or other securities. Rather, he dollar-cost averages into cheap funds and index funds and holds them forever in tax-advantaged accounts.
-
Save Over $40 on Audible With Amazon's Latest Deal
Amazon’s latest promotion lets you score three months of Audible for just $0.99 a month.
By Erin Bendig Published
-
Buy eBay and Sell Etsy, Morgan Stanley Says
Morgan Stanley is bullish on eBay and bearish on Etsy. Here’s what you need to know.
By Joey Solitro Published
-
Stock Market Today: Dow Slips After Travelers' Earnings Miss
The property and casualty insurer posted a bottom-line miss as catastrophe losses spiked.
By Karee Venema Published
-
Stock Market Today: Stocks Stabilize After Powell's Rate-Cut Warning
The main indexes temporarily tumbled after Fed Chair Powell said interest rates could stay higher for longer.
By Karee Venema Published
-
Stock Market Today: Stocks Reverse Lower as Treasury Yields Spike
A good-news-is-bad-news retail sales report lowered rate-cut expectations and caused government bond yields to surge.
By Karee Venema Last updated
-
Stock Market Today: Nasdaq Leads as Magnificent 7 Stocks Rise
Strength in several mega-cap tech and communication services stocks kept the main indexes higher Thursday.
By Karee Venema Published
-
Stock Market Today: Stocks Tumble After a Hot Inflation Print
Equities retreated after inflation data called the Fed's rate-cut plans into question.
By Dan Burrows Published
-
Stock Market Today: Stocks End Mixed Ahead of Key Inflation Reading
Equities struggled before tomorrow's big Consumer Price Index report.
By Dan Burrows Published
-
Stock Market Today: Stocks Closed Mixed in Choppy Trading
Volatility returned as market participants adjusted their expectations for rate cuts.
By Dan Burrows Published
-
Stock Market Today: Stocks Rally After Blowout Jobs Report
Stocks soared into the weekend as investors brushed off strong payrolls data and lowered rate-cut expectations.
By Dan Burrows Published