Artificial intelligence could help Adobe win customers and get them to pay more for products, according to BMO Capital Markets. Analyst Keith Bachman upgraded the software stock to outperform from market perform and hiked his price target by $70 to $570. His new price target implies shares could rally 17.3% in the next year from Tuesday’s close. Bachman said a key assumption when upgrading the stock was that new users and the price and mix should more than offset any efficiency gains from generative AI. “We believe that ADBE can capture price/mix, as well as new users, through generative AI,” he said in a note to clients Wednesday. “In addition, our recent survey feedback on Adobe Express has been positive.” Shares rose 1.4% in premarket trading Wednesday. Adobe has gained 44.4% in 2023, outperforming the broader market. ADBE .SPX YTD mountain Adobe vs. the S & P 500, year to date AI should allow Adobe to increase prices for existing solutions or offer new stock-keeping units, Bachman said. He added that users would likely be willing to spend more on solutions that utilize AI. Retention should also rise with AI, according to the analyst. That should, in turn, improve the company’s mix. Bachman highlighted that the initial controlled and limited beta for Firefly, Adobe’s AI art generator, garnered interest from millions of users, including a large share of people who don’t have the company’s Creative Cloud bundle currently. And more users should get Adobe’s Creative Cloud suite — and mobile design platform Adobe Express specifically — after AI makes the products easier to use. However, Bachman noted that could be impacted by pricing and final performance. Net new annualized recurring revenue could also see a near-term bottom in 2023 before beating guidance for 2024, he said. — CNBC’s Michael Bloom contributed to this report.