Adobe (ADBE) is seeing its most pessimistic outlook from financial analysts in over a decade as experts raise concerns about the company’s future. On Tuesday, Brian Schwartz at Oppenheimer lowered his rating on the software giant, joining several other experts who are worried that the rise of Artificial Intelligence will hurt Adobe’s business. This move pushed the average price target from analysts to its lowest level since 2013, as the market begins to question if the creator of Photoshop can stay on top in a world of automated image tools.
Claim 70% Off TipRanks Premium
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential
Why the Forecast for Adobe Stock Is Changing
The latest forecast for Adobe reflects a fear that generative AI is making high-end design too easy for everyone. In the past, creative work required expensive Adobe licenses and years of training. Today, AI tools allow casual users to create professional-quality work with simple text prompts. Keith Bachman at BMO Capital Markets recently noted that this shift makes it harder for Adobe to find new customers, especially among students and freelancers who may choose cheaper AI alternatives.
Adobe Faces Growing Competition
While Adobe stock has struggled, falling over 45% since the end of 2023, other AI winners like Microsoft (MSFT) and Oracle (ORCL) have seen their values soar. This gap is a major reason for the negative sentiment. Brent Thill at Jefferies recently lowered his price target for the company from $500 to $400, pointing out that Adobe’s growth is slowing down compared to its rivals. Investors currently prefer companies that provide the underlying infrastructure for AI, rather than software companies that might be replaced by it.
Adobe Needs to Prove Itself in 2026
To change this negative forecast, Adobe needs to prove that its AI features can bring in a lot of new profit. While the company is adding AI to almost all of its products, the market is waiting for proof in the financial reports. Gabriela Borges at Goldman Sachs recently initiated a “Sell” rating, suggesting that we are only at the beginning of a multi-year challenge for the company. Until Adobe can show that it is winning the AI race, many analysts believe the stock will stay under pressure.
Is Adobe a Good Stock to Buy?
On TipRanks, Adobe stock has a Moderate Buy consensus rating based on 16 Buys, seven Holds, and one Sell rating. Also, the average 12-month ADBE price target of $454.52 implies 43.6% upside potential from current levels. Year-to-date, ADBE stock has fallen 9.9%.
