Shares of the American creative software giant Adobe (NASDAQ: ADBE) rebounded 4% on Thursday, buoyed by an optimistic rating upgrade from HSBC Holdings PLC (LON: HSBA), helping the stock to gradually shake off market pessimism surrounding the impact of artificial intelligence (AI) competition on the traditional software sector.

Analyst Stephen Bersey of HSBC issued a report that day, raising his rating on Adobe's stock from 'Hold' to 'Buy' and lifting his price target from $282 to $308. Bersey noted in the report that while design software stocks are vulnerable to bearish sentiment in the AI era, leading Adobe's shares to fall 34% year-to-date, the market has clearly overestimated the negative impact of AI competitors on traditional design software.

HSBC's research indicates that generative AI has not yet had a "material business impact" on Adobe. The platform demonstrates strong "customer stickiness" due to users' high familiarity with Adobe's existing workflows, and users have maintained a keen interest in the AI innovation features Adobe itself has introduced.

This optimistic view is supported by data from Adobe's recent earnings report. In the just-completed fiscal second quarter, Adobe achieved better-than-expected growth in both revenue and profit, and subsequently raised its full-year revenue guidance for fiscal 2026 from the previous range of $25.9 billion to $26.1 billion to a new range of $26.5 billion to $26.6 billion.

It is noteworthy that Wall Street remains cautious about a broad recovery in the software sector. Data from Dow Jones Market Data shows that among analysts tracked by FactSet, just over one in five have a 'Buy' rating on Adobe, with the majority maintaining a 'Hold' rating. However, due to the steep prior declines, some oversold software stocks have recently seen targeted buying. Besides Adobe, Guggenheim analyst John DiFucci recently upgraded both Salesforce and ServiceNow to 'Buy', explicitly stating that the market's previous "doomsday predictions" for the software industry were severely detached from reality; investment bank D.A. Davidson also expressed a positive outlook for Palantir.

Analysts point out that traditional software companies are currently in a window where they must prove their "AI resilience" to investors. Adobe's transformation is further accompanied by the unique challenge of executive turnover. In March, CEO Shantanu Narayen, who had led the company for 18 years, announced he would step down once a successor is found. Last month, Chief Financial Officer Dan Durn also left to join semiconductor giant Marvell. This frequent executive turnover has, to some extent, intensified investor rotation strategies favoring chips over software. Adobe will still need to rebuild market confidence through a sustained ability to monetize AI.