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Jefferies analysts said Adobe’s results showed “ongoing AI progress,” but “maybe not enough to appease bears.”
Adobe shares slumped Friday, as the design software developer failed to impress with its quarterly results, despite topping Wall Street estimates.
Several Wall Street analysts indicated Adobe’s results didn’t suggest enough progress with its own AI offerings to ease worries it could be held back by growing competition and AI disruption.
Deutsche Bank said it expects the stock “to remain range-bound until the company demonstrates more tangible success from AI.”
Adobe (ADBE) shares slumped Friday, as the design software developer failed to impress with its quarterly results, despite topping Wall Street estimates and boosting its full-year outlook.
The stock was among the S&P 500’s worst-performing constituents Friday, sinking about 5% to close near $392, leaving shares down 12% for 2025.
“The key investor question remains when (if) AI innovation can move the needle,” wrote Morgan Stanley analysts, who added the quarter “brought little to quell the bear concern around AI contribution being unable to reaccelerate growth while bulls must remain patient for encouraging AI metrics to move the needle.”
Still, the analysts said they are “overweight” on the stock with a $510 target, expecting Adobe AI monetization to ramp up in the next fiscal year.
Jefferies analysts, who reiterated a “buy” rating and $590 price target on Adobe’s potential growth driven by its AI offerings, echoed the comments, writing that while the firm’s earnings showed some AI progress, it was “maybe not enough to appease bears.”
Jefferies also noted that Adobe’s forecast, while higher, would imply a slowdown in growth in the fiscal fourth quarter, though they added they believe it “reflects management’s conservatism amid ongoing macro uncertainties.”
Bank of America, which raised its target to $475 from $424 on Adobe’s outlook and AI growth potential, said the company demonstrated “solid execution in a weaker software backdrop,” calling it a “break from this reporting season, with most software companies opting not to flow through upside to the full year.”
Citi analysts, however, were less convinced, citing worries growing competition and AI disruption could hold Adobe back. Citi issued a “neutral” rating for the stock and $465 target.
Deutsche Bank analysts, who affirmed their “hold” rating and $475 target, said they “expect the stock to remain range-bound until the company demonstrates more tangible success from AI.”
