Strong Q2 Showing Pushes Autodesk Stock Up 6%: What’s Next?

Autodesk stock (NASDAQ: ADSK) price rose by 5.9% on Thursday, 29th August, even as the benchmark S&P 500 index traded sideways. Autodesk’s peer Oracle (NYSE: ORCL) did not have a good day either, with its stock barely moving the needle.

Autodesk’s gains followed its fiscal Q2 2025 results announcement, with the company outperforming street expectations of revenues and earnings. It posted total revenues of $1.51 billion in the quarter – up 12% y-o-y, mainly due to a 14% growth in the Architecture, Engineering, and Construction product category, a 7% rise in the AutoCAD, and a 16% increase in the Manufacturing segment. Further, it raised the full-year financial guidance for FY2025 (1st Feb – 31st Jan), with revenues expected to remain between $6.08-6.13 billion.

Amid the current financial backdrop, ADSK stock has seen a decline of 10% from levels of $305 in early January 2021 to around $270 now, vs. an increase of about 50% for the S&P 500 over this roughly 3-year period. However, the decrease in ADSK stock has been far from consistent. Returns for the stock were -8% in 2021, -34% in 2022, and 30% in 2023. In comparison, returns for the S&P 500 have been 27% in 2021, -19% in 2022, and 24% in 2023 – indicating that ADSK underperformed the S&P in 2021 and 2022.

In fact, consistently beating the S&P 500 – in good times and bad – has been difficult over recent years for individual stocks; for heavyweights in the Information Technology sector including SATS, COMM, and AAPL, and even for the megacap stars GOOG, TSLA, and MSFT. In contrast, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has outperformed the S&P 500 each year over the same period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics. Given the current uncertain macroeconomic environment with high oil prices and elevated interest rates, could ADSK face a similar situation as it did in 2021 and 2022 and underperform the S&P over the next 12 months – or will it see a recovery?

Autodesk is a global leader in 3D design, engineering, and entertainment technology solutions. Autodesk’s revenues have grown considerably over the recent years due to an increase in the subscriber base across subscription types. Further, it has a recurring revenue rate of around 98%. The top line has grown 56% from $3.27 billion in 2020 to $5.1 billion in FY 2024. Overall, ADSK has strong growth numbers, leading to an analyst consensus estimate of $275 per share – around 7% above its current market price.

ADSK has successfully moved to a cloud-based model. Further, new initiatives such as the token-based Flex offering and Autodesk-AI are likely to strengthen its position as a market leader. Overall, Autodesk is expected to continue its growth momentum in the subsequent years.

[1] Returns as of 8/30/2024
[2] Cumulative total returns since the end of 2016

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