Data and news in this article are current as of December 4, 2025. Figures may change as markets move.
Adobe stock today: price, performance and valuation
Adobe shares were recently trading around $328 per share, giving the company a market value of roughly $137–138 billion. [1]
Over the past year, the stock has had a rough ride:
- 12‑month total return: about ‑37% [2]
- Year‑to‑date 2025 total return: about ‑26% [3]
- 12‑month trading range: roughly $312 (low) to $558 (high) [4]
- From its pandemic-era peak, Adobe is now down more than 50%, with its market cap shrinking from about $341 billion at the high to around $138 billion today. [5]
On valuation, multiple data providers show a similar picture:
- Trailing P/E: ~19–21x earnings [6]
- Forward P/E (next 12 months): around 14–15x, well below Adobe’s own 3‑ and 5‑year averages in the 30s and 40s. [7]
- Zacks estimates Adobe’s forward P/E at ~13.7x and a PEG ratio of ~0.97, compared with an industry PEG around 1.8+, suggesting the stock trades at a discount to its software peers given its growth outlook. [8]
In short: by historical standards, Adobe is now priced more like a “normal” software company than the premium growth franchise it used to be—and that disconnect is exactly what today’s commentary is arguing about.
Today’s key headlines for Adobe (December 4, 2025)
A flurry of fresh research notes and opinion pieces dropped around Adobe on December 4, 2025. Here are the main themes investors are digesting.
1. Citigroup cuts its target – consensus cools
Citigroup lowered its price target on ADBE from $400 to $366 and kept a “neutral” rating, implying only modest upside from current levels. [9]
MarketBeat data show a consensus rating of “Hold” with an average target around $428 from roughly 29–30 analysts, with individual targets ranging from the high‑$200s to about $590. [10]
This follows an earlier high‑profile downgrade from Melius Research, which moved Adobe to Sell with a $310 target, arguing that “AI is eating software” and that Adobe risks losing share to both hyperscalers (Microsoft, Oracle) and design upstarts like Figma and Canva. [11]
Takeaway: The sell side is now split: some houses still see 30–40% upside, but others argue AI will structurally compress Adobe’s growth and multiples.
2. “Extremely cheap amid AI fears” – value case loud and clear
A widely circulated piece on TalkMarkets/Invezz calls Adobe stock “extremely cheap amid AI fears.” It notes:
- The share price around $325
- A market cap down to about $138 billion
- A drawdown of over 50% from pandemic peaks
The article frames the slump as being driven more by sentiment about AI disruption than by collapsing fundamentals, and argues that current valuation could be attractive for long‑term investors willing to look past near‑term volatility. [12]
Similar bullish tones appear on Seeking Alpha in “Adobe: AI Fears Are Overblown” and “AI Won’t Kill Adobe, Here’s Why.” These pieces highlight robust revenue growth, strong free‑cash‑flow margins and forward valuation metrics near the mid‑teens as evidence that the market is overly pessimistic about AI risk. [13]
3. “Why is Adobe stock falling?” – competition worries dominate the bear case
A new Motley Fool article, “Why Is Adobe Stock Falling in 2025, and Is It a Buying Opportunity for 2026?”, lays out the other side: investors are notably worried about innovation from rivals, especially rapid improvements in AI‑driven design tools and low‑cost alternatives. [14]
The piece emphasizes that:
- Adobe is still fundamentally profitable and growing
- But growth expectations have reset lower, and the market is unsure how quickly AI features can be monetized
- The question becomes whether the stock’s drop is a value opportunity or a sign of long‑term erosion of Adobe’s moat
4. Q4 earnings preview – expectations for December 10
Adobe will report Q4 and full‑year FY2025 results on Wednesday, December 10, 2025, after the market close, followed by a 2–3 p.m. PT investor call. [15]
Wall Street is broadly aligned on what to expect:
- Consensus Q4 EPS: about $5.39–$5.40
- Consensus Q4 revenue: roughly $6.11 billion, implying >9% year‑over‑year growth [16]
- Company guidance for Q4 non‑GAAP EPS is $5.35–$5.40 and revenue $6.075–$6.125 billion. [17]
TipRanks notes that EPS estimates are about 12–13% higher than last year’s Q4, and revenue is expected to grow just over 9%, framing this as a solid, but not explosive, print. [18]
A MarketBeat preview and a 24/7 Wall St. piece point out that retail traders are pricing in roughly a 90% chance that Adobe beats estimates on December 10, underscoring bullish short‑term positioning into earnings. [19]
5. “AI fears are overblown” vs. “priced for busted growth”
Today’s newsflow reflects a tug‑of‑war between two narratives:
- Bullish AI narrative:
- Seeking Alpha commentators argue that AI is more likely to strengthen Adobe’s ecosystem than destroy it, as generative models become embedded in tools like Photoshop, Acrobat and Experience Cloud rather than pure substitutes. [20]
- Several analyses highlight forward P/E and price‑to‑free‑cash‑flow ratios around the mid‑teens, much lower than in past cycles for Adobe. [21]
- Skeptical “busted growth” view:
- Other notes, including earlier pieces such as “Adobe: The AI Dream Is Fading Away” and “A Misunderstood Leader, Priced For Busted Growth”, argue that competitive pressures and slower growth justify today’s cheaper valuation. [22]
- The Melius downgrade and Citi’s fresh cut today add institutional weight to that cautious stance. [23]
Net effect: The market now treats Adobe less like a hyper‑growth story and more like a mature, cash‑generative software franchise whose growth trajectory is in question.
Fundamentals: what Q3 2025 told investors
Adobe’s latest reported quarter, Q3 FY2025 (ended Aug. 29, 2025), was objectively strong:
- Total revenue:$5.99 billion, up 11% year‑over‑year and ahead of consensus around $5.91 billion [24]
- GAAP EPS:$4.18; non‑GAAP EPS:$5.31, up about 14% year‑over‑year and beating estimates around $5.18 [25]
- Operating cash flow: about $2.2 billion for the quarter [26]
- Remaining performance obligations (RPO): roughly $20.4 billion, up 13% year‑over‑year, underscoring strong visibility. [27]
Segment detail shows where the growth is coming from:
- Digital Media (Creative Cloud + Document Cloud):
- Revenue $4.46 billion, up 12% year‑over‑year
- Digital Media ARR $18.59 billion, up 11.7% year‑over‑year [28]
- Digital Experience (Experience Cloud marketing, analytics, commerce):
- Revenue $1.48 billion, up 9–10% year‑over‑year
- Subscription revenue $1.37 billion, up 11% year‑over‑year [29]
AI is already a material driver:
- AI‑influenced ARR surpassed $5 billion, according to Adobe’s Q3 commentary. [30]
- New AI‑first products (Firefly, Acrobat AI Assistant, GenStudio and others) already exceeded a $250 million ARR target for the year by Q3, with usage metrics (Acrobat AI interactions, Firefly generations) growing rapidly quarter‑over‑quarter. [31]
On the back of these results, Adobe raised its FY2025 outlook:
- FY2025 revenue: now $23.65–$23.70 billion
- FY2025 non‑GAAP EPS:$20.80–$20.85 [32]
Taken in isolation, this is classic “beat and raise” behavior – which makes the stock’s ongoing slide all the more striking.
AI and product roadmap: MAX 2025, Firefly, Semrush and new partnerships
Adobe MAX 2025: broad AI rollout
At Adobe MAX 2025 in Los Angeles, Adobe rolled out a broad suite of AI‑powered tools across:
- Adobe Express
- Firefly
- Core Creative Cloud apps like Photoshop and Premiere Pro
Key upgrades included Firefly Image Model 5 and new AI‑driven audio, video and photo tools, plus tighter integration with third‑party models such as Google’s “Nano Banana” small model. The goal is to speed up content creation for both individual creators and enterprises, while keeping outputs commercially safe. [33]
These launches are meant to keep Adobe ahead of nimble AI startups in image, video and design, and to reinforce the subscription value of Creative Cloud.
Semrush acquisition: doubling down on AI marketing
In November, Adobe announced a $1.9 billion all‑cash acquisition of Semrush, a brand and SEO visibility platform heavily focused on AI‑driven search and marketing analytics. [34]
- Deal terms: $12 per share, a roughly 77% premium to Semrush’s prior close. [35]
- Timing: expected to close in the first half of 2026, subject to approvals. [36]
Strategically, Semrush gives Adobe’s Experience Cloud deeper tools to track how brands show up in search, social and generative‑AI interfaces (like ChatGPT or Gemini), a capability marketers increasingly care about.
Regional AI partnerships: Humain in the Middle East
TipRanks also highlights a new partnership with Humain, an AI firm backed by Saudi Arabia’s Public Investment Fund. The collaboration focuses on building regionalized AI models, agents and infrastructure tailored to Saudi Arabia and the broader Middle East. [37]
This fits Adobe’s strategy of localizing AI and expanding enterprise relationships in high‑growth regions, while keeping governments and regulators comfortable with data and content policies.
Competitive and regulatory overhangs: Figma, Canva and AI challengers
Adobe’s stock story cannot be separated from its aborted $20 billion acquisition of Figma and the broader competitive landscape.
- Adobe and Figma terminated their planned merger in December 2023, concluding that there was no clear path to regulatory approval in Europe and the UK. [38]
- In 2025, Figma filed for an IPO, signaling that it will continue as a well‑funded independent rival, with expanding AI features and new products in coding, marketing and illustration. [39]
Meanwhile, the Barron’s‑covered downgrade from Melius frames Adobe as caught between:
- Big platform players (Microsoft, Google, Meta, OpenAI, Oracle) building AI infrastructure and horizontal creative tools
- Vertical challengers (Figma, Canva, Runway, and others) innovating faster in web‑based design and generative media [40]
This is the core bear case:
AI reduces lock‑in and lowers switching costs, so Adobe’s pricing power and growth may erode over time.
The bull case is that:
- Adobe’s integration of Firefly and third‑party models directly into the tools creatives already use
- Its massive enterprise footprint and data in Experience Cloud
- And its compliance‑focused training data (licensed or Adobe‑owned content)
…will make it hard for rivals to replicate its depth, especially for large commercial customers. [41]
Wall Street forecasts for Adobe stock
Despite the recent target cuts, consensus still points to upside from today’s price—though the range is wide.
Earnings outlook
From Adobe’s guidance and analyst estimates:
- FY2025 non‑GAAP EPS (company target): $20.80–$20.85 [42]
- Street FY2025 EPS: roughly $16.5–17 on a GAAP basis, higher on non‑GAAP, depending on source. [43]
- FY2026 EPS (various estimates): trending higher, with many models assuming high‑single‑digit to low‑double‑digit annual growth if AI monetization continues. [44]
Given today’s share price around $328, this puts Adobe on:
- A forward P/E in the mid‑teens,
- A PEG ratio near or below 1, signaling that earnings growth roughly matches the valuation multiple. [45]
Price targets and ratings
Different data providers show slightly different samples, but they broadly cluster as follows:
- MarketBeat: average 12‑month target ~$428, range $280–$590, consensus rating “Hold”. [46]
- Investing.com: average target around $450, high $605, low $270; consensus rating “Buy.” [47]
- StockAnalysis: 23‑analyst sample with an average target around $455, implying roughly 39% upside, and a “Buy” consensus. [48]
- 24/7 Wall St. / Reuters‑based summaries: suggest a mean target near $450, with most analysts still in the Buy/Strong Buy camp, but a minority recommending Sell. [49]
Taken together, the Street still expects 30–40% upside over the next year, but that average hides growing dispersion:
- Bears like Melius (~$310) and Citigroup ($366) argue that AI pressure justifies a lower multiple. [50]
- Bulls maintain targets around $460–$500+, assuming AI‑driven demand and Experience Cloud growth will re‑accelerate. [51]
How to read Adobe’s setup going into Q4 earnings
For investors watching Adobe into the December 10 earnings release, today’s news flow crystallizes a few key questions.
1. Can Adobe prove that AI is accretive, not dilutive?
Key metrics to watch:
- AI‑influenced ARR and AI‑first ARR growth (Firefly, Acrobat AI Assistant, GenStudio) [52]
- Attach rates of AI features in Creative Cloud and Document Cloud subscriptions
- Early revenue contributions from Semrush once the deal closes, and from AI‑enhanced Experience Cloud campaigns [53]
If AI‑driven revenue grows faster than the core, the “AI is eating Adobe” narrative weakens.
2. Is growth stabilizing at a sustainable level?
Q3 showed:
- 11% total revenue growth
- Double‑digit growth in both Digital Media and Digital Experience [54]
Guidance implies high‑single‑digit to low‑double‑digit growth for the near term. The market seems to be asking:
- Is this the new normal (and therefore appropriately valued at ~15x forward earnings), or
- A trough from which Adobe can re‑accelerate via AI and new products?
Seeking Alpha and Motley Fool’s more optimistic pieces argue that, given the company’s track record and pipeline, the market is underestimating Adobe’s ability to grow from here. [55]
3. Does the valuation already price in the worst?
From a pure numbers standpoint:
- YTD total return of around ‑26% and a 12‑month drawdown of ~‑37% have already compressed the multiple. [56]
- Adobe’s current P/E is about half its 10‑year average, and its forward P/E is far below historical norms for both Adobe and the broader quality software cohort. [57]
That’s why many of today’s articles—from Invezz to Seeking Alpha to Forbes—frame Adobe as either a mispriced quality compounder or a value trap, depending on how you feel about AI competition. [58]
Bottom line
On December 4, 2025, the market is sending a mixed but very clear message about Adobe:
- Fundamentals remain strong: double‑digit growth, record revenue, rising AI‑influenced ARR and robust cash generation. [59]
- Valuation is no longer “priced for perfection”: forward multiples in the mid‑teens, PEG near 1 and a share price more than 50% below prior peaks. [60]
- Sentiment is fragile: fresh downgrades, vocal AI skepticism and intense competition from Figma, Canva and others continue to weigh on the story. [61]
Whether Adobe is a bargain or a value trap now largely hinges on what happens over the next few quarters:
- Does AI meaningfully accelerate revenue and ARR?
- Can management prove durable pricing power in Creative Cloud and Experience Cloud?
- And will deals like Semrush and partnerships like Humain unlock new profit pools, or simply add complexity? [62]
For now, the consensus view is cautiously optimistic—with upside priced in but not guaranteed. Q4 results on December 10, 2025 are likely to be a major catalyst in deciding which side of the AI debate wins, at least in the near term.
References
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