New York, Jan 5, 2026, 20:40 EST — Market closed
- Jefferies downgraded Adobe to “hold” from “buy” and cut its price target to $400 from $500, citing a lack of clear AI-driven acceleration. 1
- Adobe shares ended down 0.5% at $331.56, after dipping to $327.51 earlier in the session.
- The next major catalysts include the U.S. December jobs report on Jan. 9 and Adobe’s fiscal Q1 earnings call on March 12. 2
Adobe (ADBE.O) shares slipped on Monday after Jefferies downgraded the Photoshop maker to “hold,” arguing that the company’s push to monetise new artificial intelligence tools is not yet translating into faster growth. The stock ended down 0.5% at $331.56. 1
The downgrade matters now because investors are re-pricing software stocks around a simple question: will generative AI add incremental subscription revenue, or pressure the value of traditional application licences? For Adobe, which has leaned on Creative Cloud subscriptions for years, that debate is moving from product demos to revenue math. 1
Jefferies analyst Brent Thill wrote that “any contribution boost from AI has yet to show up,” and said he still sees “no AI inflection” — a clear turn toward faster growth — in the company’s outlook. 1
Jefferies lowered its price target, an analyst’s estimate of where shares could trade over the next 12 months, to $400 from $500, according to reports of the note. In the same shift in software calls, the broker upgraded IBM to “buy,” and IBM shares finished up about 1.2%. 1
The firm pointed to rising competition at the lower end of Adobe’s market, where casual users can choose from a growing list of cheaper, AI-enabled tools. Jefferies said Adobe’s franchise remains better defended among professional creators who rely on deeper editing features and workflow integration. 3
Adobe last month forecast fiscal 2026 revenue of $25.90 billion to $26.10 billion, above Wall Street estimates, and highlighted stronger demand for its design software alongside growing engagement with AI features. The company also said it would buy Semrush for $1.9 billion to strengthen its advertising offering. 4
On Monday, Adobe traded between $327.51 and $334.37, leaving the session low near $328 as a near-term reference point for chart-focused traders. A move back above $334 would put the stock near its best levels of the day.
The risk for bulls is that AI becomes more of a substitute than an add-on, pulling casual users away and forcing tougher pricing decisions. A broader pullback in marketing and creative budgets would also threaten near-term subscription growth, even if Adobe’s core customer base holds up. 3
Macro data could complicate the picture this week. The U.S. December employment report is due on Friday, Jan. 9, and shifts in rate expectations often spill into high-multiple software stocks. 2
For Adobe, the next company-specific checkpoint is its first-quarter fiscal 2026 earnings call on March 12. Investors will be watching for updates on subscription momentum and annual recurring revenue (ARR), a measure that annualises subscription sales, along with any clearer signals that paid AI features are lifting revenue. 5
