Adobe (ADBE) shares slid at the end of this past week, as investors in the stock worried about the returns from the company’s AI adoption. While the company raised its annual revenue forecast, analysts were concerned that the company’s AI adoption into its software tools could take longer to fetch returns.
“(We see) increasing concerns surrounding competitive pressures and a longer time horizon to reach notable AI monetization,” said Angelo Zino, senior equity analyst at CFRA Research. Adobe said in April that it would add AI models from OpenAI and Google to Firefly, its generative AI tool. While it sounds like a solid addition, there is concern that it will take too long to reap profits, considering Adobe’s investments. Adobe now expects full-year 2025 revenue between $23.50 billion and $23.60 billion, up from its prior estimates of $23.30 billion to $23.55 billion.
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“While guidance was raised and management remains positive around demand generation, it feels like it will take more time to prove out these (AI) initiatives and quiet concerns of competition around GenAI,” RBC analysts also said in an investors’ note. Several brokerages cut their price target on Adobe stock following the second-quarter results.
According to analysts at CNN, though, now may be a solid time to invest in Adobe ADBE. With the stock currently trading below its 200-day moving average, ADBE may be in a buy-the-dip situation. Out of 42 analysts surveyed by CNN, 67% suggest holding onto ADBE, while 31% suggest buying. The analysts forecast a median climb of 23% over the next 12 months, but a high-end projection of 61.93% to $630 a share.