SEMR Stock Rockets 70% Pre-Market After Adobe Moves On $1.9B Semrush Deal

• SEMR shares surged nearly 70% pre-market, trending among top tickers on Stocktwits.
• Acquisition allows Adobe to enhance AI capabilities across marketing and digital platforms.
• Semrush’s enterprise clients include Amazon and TikTok.

Adobe (ADBE) announced on Wednesday a $1.9 billion deal to acquire Semrush (SEMR) in an all-cash transaction.

The deal will see Adobe pay $12 per share for Semrush, whose market value was just over $1 billion after closing Tuesday at $6.76. SEMR’s stock soared nearly 70% in pre-market trade – on track to hit a nine-month high – and was among the top trending tickers on Stocktwits. Retail sentiment around the company on the platform jumped to ‘bullish’ from ‘neutral’ territory as chatter rose to ‘high’ from ‘normal’ levels over the past day.

The acquisition would represent a modest investment for Adobe, which has a market capitalization exceeding $135 billion. ADBE’s stock edged 0.16% higher in pre-market trade. On Stocktwits, retail sentiment around the company trended in ‘bearish’ territory over the past day. 

Adobe’s AI Position

Adobe has faced investor scrutiny this year after its stock fell roughly 20%, amid questions about its ability to scale AI-powered offerings. Revenue growth has remained steady, driven by Creative Cloud, Document Cloud, and Experience Cloud, but rising costs tied to AI research and infrastructure have weighed on margins.

The Semrush acquisition is part of Adobe’s strategy to bolster its AI portfolio. The company was reportedly in talks to acquire London-based AI startup Synthesia for roughly $3 billion, which develops software for AI-generated video avatars.

Buying Semrush would allow Adobe to strengthen its suite of marketing tools, helping brands track how they are perceived online through new large language models (LLMs). Its enterprise clients include Amazon and TikTok.

Last month, Morgan Stanley downgraded Adobe to ‘Equal Weight’ from ‘Overweight,’ citing slower recurring revenue growth from digital media and uncertainty about generative AI’s potential to expand the total addressable market. The firm set a price target of $450, down from $520.

Wall Street has an average price target of $452.75 on ADBE’s stock, which represent a potential upside of nearly 40% from Tuesday’s close, according to Koyfin data.

Read also: Bitcoin Holds $91,000 While IBIT Records Highest ETF Outflow Since Its Debut – ‘Almost Feels Like A Cabal’ Is Keeping BTC Price Up, Says Jim Cramer

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Share

·

Add us on