New York, January 29, 2026, 19:45 (EST) — After-hours
- Adobe shares slipped 2.7% in late trading, dragged down by a widespread selloff in software stocks
- Soft guidance from SAP and a post-earnings slide in ServiceNow fueled ongoing concerns about AI disruption
- Traders are focused on Friday’s U.S. data release and Adobe’s upcoming earnings report in March
Adobe Inc shares slipped 2.7% to $291.65 in late after-hours on Thursday, following an intraday range from $285.11 to $296.93. The session saw roughly 7.4 million shares change hands.
U.S. software stocks took a hit, triggered by disappointing results from SAP and ServiceNow that rekindled worries about AI cutting into subscription software revenue. SaaS—selling software through subscriptions instead of one-time licenses—is now under scrutiny as investors question how solid that demand really is. J.P. Morgan analysts noted, “The malaise in software sentiment persists,” while Adam Turnquist of LPL Financial said the market seems to be pricing in “a worst-case scenario that ‘software is dead.’” Reuters
Adobe slipped 2.6% in regular trading, dragged down as the software sector took a hit following Microsoft’s earnings and worries over hefty AI investments. John Praveen, managing director and co-CIO at Paleo Leon, warned that “AI investments will eat the software companies’ lunches.” Jay Hatfield, CEO and CIO of Infrastructure Capital Advisors, added that the concern is AI might “disrupt their business” by replacing portions of what software companies currently offer. Reuters
For Adobe, the key issue now is whether Thursday’s slide is simply fallout from the broader sector or signals a fresh reevaluation of mature software firms dependent on recurring subscription income.
That discussion has lingered since Adobe’s previous earnings, when it projected fiscal 2026 revenue and earnings to surpass Wall Street expectations. The company highlighted strong demand for its design software and expansion in its AI products, notably Firefly.
The market mood has swung quickly. Investors are eyeing signs that enterprise clients might cut back on spending and wondering if generative AI tools could divert work from paid software. This kind of pressure tends to surface subtly—in contract renewals and pricing—before it impacts headline revenue.
There’s another way to look at it. If the next batch of company reports reveals AI features boosting higher-value subscriptions and stabilizing demand, the “disruption” trade could reverse as fast as it appeared. If that doesn’t happen, the downside is clear: weaker forecasts and falling multiples.
Traders are focused on Friday’s U.S. productivity and labor cost report, set for release at 8:30 a.m. Eastern. The data could shift rate expectations and impact long-duration tech stocks.
Adobe is set to report its fiscal 2026 first-quarter earnings on Thursday, March 12, at 2:00 p.m. Pacific Time.
