Adobe shares tumbled 7% in early trading Friday, as investor unease over the pace of AI integration overshadowed the company’s upgraded full-year revenue forecast. The drop reflects growing concern that Adobe’s AI-powered features, including integrations with OpenAI and Google models into its Firefly generative tool, may take longer to yield significant financial returns.
CFRA Research analyst Angelo Zino noted “increasing concerns surrounding competitive pressures and a longer time horizon to reach notable AI monetization,” while RBC analysts echoed that although demand signals remain strong, proving out the AI initiatives will require more time to calm investor anxiety about generative AI competition.
Despite the headwinds, Adobe raised its fiscal 2025 revenue forecast to a range of $23.50 billion to $23.60 billion—up from $23.30 billion to $23.55 billion. The company remains a cornerstone of the creative software market, with flagship tools like Photoshop and Premiere Pro widely used by professionals.
Still, skepticism persists. At least five brokerages have cut their price targets on Adobe stock following its Q2 earnings, and year-to-date, shares are down approximately 13%.
With a 12-month forward P/E ratio of 18.88, Adobe now trails competitors like Autodesk, whose valuation stands at 29.16—suggesting investors are discounting Adobe’s near-term AI profitability until clearer evidence of monetization emerges.
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