Adobe's stock price experiences a 15% increase, marking its sharpest rally since 2020.

• Adobe reported revenue and earnings that topped analysts' estimates.
• On Friday, the stock experienced its largest increase of 15% since the start of the pandemic in March 2020.
• Narayen, CEO of the software company, highlighted the company's unique approach to AI and its focus on delivering innovative products.

On Friday, the software maker's shares experienced a 15% increase, which was the largest surge since March 2020, following the release of earnings and revenue that surpassed analysts' expectations.

On Thursday, Adobe reported earnings per share of $4.48, surpassing the LSEG consensus estimate of $4.39 per share. Additionally, the company's revenue increased by 10% from the previous year to $5.31 billion, which was higher than the analysts' predictions of $5.29 billion.

Adobe's record revenue is due to its growth in Creative Cloud, Document Cloud, and Experience Cloud, as well as its advancements in artificial intelligence, according to CEO Shantanu Narayen.

Narayen stated in a press release on Thursday that our unique approach to AI and cutting-edge product delivery is drawing in a growing number of customers and enhancing the value we offer to our existing users.

The Digital Media business's new annualized recurring revenue, including Creative Cloud subscriptions, exceeded the StreetAccount consensus of $437.4 million, reaching $487 million.

Adobe's results differ from what software investors have witnessed from many industry peers in recent times. Last month, Adobe's shares experienced their worst decline since 2004 after the cloud software vendor reported weaker-than-expected revenue and issued disappointing guidance. Additionally, during the same week, SentinelOne, UiPath, and Veeva all adjusted their full-year revenue projections.

Despite fourth-quarter results falling short of Wall Street expectations, shares in the sector rallied after the database company announced cloud deals with and OpenAI. Additionally, shares of jumped on Monday following the announcement that the cybersecurity company would be added to the S&P 500.

Analysts with a hold rating on Adobe wrote that the company's results were positive despite a difficult economic climate and heightened competition in design software.

The analysts wrote that they appreciate how Adobe is incorporating AI capabilities into its product offerings.

Piper Sandler analysts raised their revenue estimates for fiscal year 2024 by $73 million and for 2025 by $71 million.

Piper Sandler analysts recommended buying the stock, as they observed encouraging customer reactions to recent innovations and predicted that the increasing availability of AI-powered solutions would drive further user acquisition and higher average revenue per user.

Despite Friday's rally, Adobe shares are still down 12% for the year, with a stock price of $525.88 in the afternoon.

WATCH: CNBC's interview with Adobe CEO Shantanu Narayen