As shares of cloud industry players such as Adobe Inc. (ADBE) and Workday Inc. (WDAY) sharply outperform the broader market, some market watchers are expecting even-better times ahead for Adobe, in particular, pointing to the stock's solid fundamentals and technical indicators.
In an interview with CNBC's "Trading Nation" on Tuesday, Gina Sanchez, chief executive officer (CEO) of asset allocation advisor Chantico Global, made the bullish case for Adobe to extend its near 50% run year-to-date (YTD).
Adobe is a Solid Play in a Divided Group
On Tuesday, the San Jose, Calif.-based tech giant skyrocketed 9.5% as Wall Street applauded its cloud-oriented product road map and sales guidance for next year. Adobe's earnings beat comes at a relatively rocky time for the tech sector, which bore the brunt of a larger global market sell-off last week on fears of rising rates, global trade tensions and new regulations.
"The Nasdaq has been facing real issues and real tests over the last several trading sessions, and I don't think that's going to stop," Los Angeles-based Sanchez stated. "Adobe probably has the best fundamentals. From a fundamental point of view, I think Adobe is probably going to be a clear winner. But I don't think this is a one, unified group."
The Chantico Global CEO indicated that Adobe is trading at a significant discount to cloud market pioneer Salesforce.com Inc. (CRM), whose shares she views as overvalued.
The big question moving forward will be where the market sets expectations for pricing and valuation, Sanchez said, adding that that could be "the one fly in this ointment."
Todd Gordon of TradingAnalysis.com chimed in on the segment with a similar bullish outlook for Adobe, pointing to the stock's technical charts.
"It's a really nice-looking chart," the TradingAnalysis.com founder said. "If we go back to the summer of 2017, it's a very nice symmetrical, rhythmical, very logical up-trend support." Gordon highlighted Adobe's ability to hold technical support, an indicator for future gains.