AI Stock Expected to Surpass Nvidia by 2028

Nvidia has dominated the market in recent years, but Adobe is projected to perform even better over the next three years. Since the launch of OpenAI's ChatGPT on November 30, 2022, there has been a surge of interest in generative AI, benefiting Nvidia significantly. Nvidia's stock price has increased more than tenfold, making it the most valuable company globally with a market cap exceeding $4 trillion.

However, the next three years are expected to differ. Nvidia has seen a 73% year-over-year increase in data center revenue, but competitors are advancing in AI accelerator chip development. AMD recently unveiled its MI400X, which competes with Nvidia's platform. Additionally, major customers are developing custom AI accelerators, potentially reducing demand for Nvidia's general-purpose GPUs.

In contrast, Adobe faces both threats and opportunities from AI advancements. Its Creative Cloud suite is an industry standard, and the integration of AI tools is increasing revenue per user. Adobe's Firefly app has attracted new users, with a more than 30% increase in first-time subscribers in the recent quarter.

Adobe expects revenue from AI products to more than double, positively impacting its overall revenue. The company is buying back shares, steadily increasing earnings per share. Currently trading at 17 times earnings, Adobe is anticipated to outperform Nvidia by 2028 due to consistent earnings growth.