Adobe Systems Incorporated ADBE is leaving no stone unturned to expand capabilities in the promising 3D modelling space.
The company is acquiring Oculus Medium, which is a digital sculpting software designed to work in a Virtual Reality (VR) environment from Facebook FB. This move is in sync with the company’s strategy.
Notably, Oculus Medium sculpting app will also strengthen Adobe’s VR capabilities. Per the deal, Medium team will join Adobe family and bolster the company’s portfolio of 3D and VR tools.
Further, the acquisition will add strength to Adobe’s Substance app for 3D texturing, which bodes well for its 3D and immersive strategy.
Prospects in 3D & VR Markets
We believe the latest move will enable Adobe to enhance offerings of 3D and VR tools for customers.
Moreover, Adobe’s presence in the global 3D mapping and modeling market will expand on the back of Oculus Medium. Per a report from MarketsandMarkets, this particular space is expected to reach $6.5 billion by 2023, witnessing a CAGR of 18% between 2018 and 2023.
Further, a Mordor Intelligence report shows that the market is expected to see a CAGR of 20.94% between 2019 and 2024.
Additionally, Adobe’s latest move will aid it in capitalizing on opportunities present in the VR market. Notably, VR tools are gaining momentum in this data-driven world thanks to the interaction between the real world and 3D virtual objects in real time.
According to Fortune Business Insights report, the global VR market is expected to see a CAGR of 42.2% over a period of 2018-2026 and reach $120.5 billion by 2026.
Further, data from MarketsandMarkets indicate that the market is projected to hit $44.7 billion by 2024 at a CAGR of 33.5% between 2018 and 2024.
Given this upbeat scenario, tech companies including Alphabet’s GOOGL Google, Autodesk ADSK and Facebook are also trying to bolster presence in the 3D sculpting space.
Google offers Tilt Brush, which enables painting in 3D space under VR environment. The tool is already available on Oculus Rift and will soon be available on Oculus Quest.
Although Facebook is selling Oculus Medium, it recently launched an updated version of Quill, a painting and animation tool. With Quill 2.0, the social media giant offers an end-to-end solution for making full VR-native animated stories.
Moreover, the tool helps in creating 3D painted scenes and short animated loops.
Meanwhile, Autodesk offers Mudbox which is a 3D sculpting and painting software. Notably, Mudbox enables creation of beautiful characters and environments with in 3D space.
Nevertheless, Adobe’s increasing investment in 3D space is likely to provide it a competitive edge against the abovementioned players.
In fact, the company’s acquisition of Allegorithmic has strengthened AR/VR capabilities in Creative Cloud. Further, Allegorithmic’s hybrid VR tool allows seamless switch between desktop and VR modes that enables 3D content developers to access their work on a VR headset.
Currently, Adobe carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through Q3 2019, while the S&P 500 gained +39.6%, five of our strategies returned +51.8%, +57.5%, +96.9%, +119.0%, and even +158.9%.
This outperformance has not just been a recent phenomenon. From 2000 – Q3 2019, while the S&P averaged +5.6% per year, our top strategies averaged up to +54.1% per year.
See their latest picks free >>
Click to get this free report Facebook, Inc. (FB) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report Autodesk, Inc. (ADSK) : Free Stock Analysis Report Adobe Systems Incorporated (ADBE) : Free Stock Analysis Report To read this article on Zacks.com click here.