MW Adobe's stock is at a multiyear low, but the pummeling may not be done yet

By Emily Bary and Christine Ji

Adobe needs to convince Wall Street that AI is helping revenue growth in order for its shares to move higher, analysts say

Adobe's stock has lost almost half its value over two years.

Adobe's stock has gotten cheap, but some analysts say there's good reason for that.

The company, which sells Photoshop and Illustrator, has long had a chokehold on the market for creative software. And while Adobe $(ADBE)$ still dominates the market, there's concern about heightened competition, both from the likes of upstart rivals like Canva and new artificial-intelligence tools that let users easily generate images from text prompts.

Those fears have dragged Adobe shares to their lowest levels since November 2022, according to Dow Jones Market Data. And the stock trades at roughly 12 times forward cash flow - a multiyear low, as well -according to Baird analyst Rob Oliver.

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So does that spell opportunity for investors? Not quite, Oliver said. He titled his Wednesday note to clients: "The Beatings Will Continue Until Morale Improves."

In light of the recent selling pressure and some analyst downgrades, Oliver thought it was worth assessing whether it was time for him to take a rosier view of the pummeled stock, which has lost 48% over the past two years as the S&P 500 has gained almost that much. But his conclusion? "Inexpensive software stocks can stay inexpensive for a while."

It could "take a while" for investors to grow more confident about Adobe's own AI traction.

"Adobe has become the subject of some mockery for giving an 'AI-Influenced ARR' number reaching one-third of total business," Oliver wrote, referring to annual recurring revenue. Further, what the company calls "AI-related revenue" is now north of $250 million.

Management "may ultimately be right in how it thinks about this, but we do not expect the company to get credit until there is evidence of a turn in revenue growth," Oliver continued, while reiterating a neutral rating on the shares.

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Oppenheimer analyst Brian Schwartz also wasn't confident that Adobe's stock would see a near-term turnaround. He downgraded the stock to perform from outperform on Tuesday, writing that "there is lower confidence in the management team than seen in a long time, and less messaging to the Street" in the past year.

The fear among investors is that increased competition and slow AI execution will cause revenue growth to compress. Schwartz forecasts that revenue for Adobe's largest segment, which involves selling subscriptions to creative and marketing professionals, will grow just 9% in fiscal 2026, slowing from 11% in 2025 and 12% in 2024.

Oliver will be watching Adobe's Summit Conference in April for evidence of whether the company is seeing AI momentum. But he noted that Canva also will be making noise in April, hosting an analyst event alongside its own April user conference.

See more: Salesforce and Adobe see their stocks slide as AI fears intensify

-Emily Bary -Christine Ji

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January 14, 2026 09:16 ET (14:16 GMT)

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