Bank of America has reinstated an 'Underperform' rating on Adobe with a $190 price target, down from current levels around $225. The downgrade reflects concerns that generative AI is lowering barriers to content creation, increasing competition against Adobe's core creative software. While Adobe's AI strategy helps retain customers, it is seen as defensive and unlikely to significantly boost revenue growth. The bank forecasts Adobe's revenue growth slowing from 10.5% in fiscal 2025 to 8.8% in fiscal 2027, with risks from freemium and consumption-based pricing models adding to monetization challenges.

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Adobe shares drop 35% in 2026 amid doubts over AI strategy and pricing model.

Adobe's stock has fallen 35% this year as investors question the company's ability to compete with cheaper rivals through its pricing and AI offerings. Bank of America analyst Tal Liani expresses skepticism about Adobe's prospects, suggesting that th...

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Bearish

4 hours ago