Adobe Inc. (NASDAQ: ADBE) stock is back in the spotlight on Thursday, Dec. 18, 2025, as investors balance three forces that have increasingly defined the company’s narrative in late 2025: (1) a solid earnings-and-guidance package that leans on subscription durability, (2) a fast-evolving generative AI strategy designed to defend (and expand) Adobe’s creative and marketing software moat, and (3) rising legal and competitive risk tied to how AI systems are trained and monetized.
Shares were trading around $354 on Thursday, with the session’s range extending roughly from the low $350s to the high $350s.
Below is a detailed roundup of the latest Adobe stock news, the company’s FY2026 forecast, and the most relevant Wall Street analyst calls and debates shaping the ADBE outlook as of Dec. 18.
What’s moving Adobe stock right now
1) Citi lifts its Adobe price target (but stays cautious)
One of the most notable fresh analyst actions circulating today: Citigroup raised its price target on Adobe to $387 from $366 while maintaining a Neutral rating, signaling a slightly improved view after the company’s latest results—but not enough to turn outright bullish. [1]
For investors, this kind of “target up, rating unchanged” move often reads as: the downside case looks less severe than it did a week ago, but the firm still sees meaningful execution and competitive questions.
2) New AI-related legal risk enters the Adobe story
A proposed class action filed this week adds a new overhang: Reuters reports that author Elizabeth Lyon sued Adobe, alleging Adobe used pirated copies of copyrighted books to train its SlimLM small language models without permission. The case is described by Reuters as the first AI-training copyright lawsuit against Adobe, and it seeks monetary damages on behalf of a proposed class of copyright owners. Adobe did not immediately respond to a request for comment, Reuters said. [2]
This matters for Adobe stock because “AI training data” litigation has become a material headline risk across the sector—raising the possibility of damages, changes to model training practices, higher compliance costs, or restrictions that could slow AI product cycles.
3) ADBE’s most recent trading context: a rebound attempt
Adobe shares gained about 2% in the prior session (Dec. 17), according to MarketWatch’s comparison of Adobe and peers. [3]
That move fits the broader pattern of the past week: a post-earnings stabilization after months of investor anxiety around AI-native competitors and pricing pressure.
Adobe earnings recap: strong Q4, record FY2025, and a very specific FY2026 playbook
Adobe’s latest earnings package (released Dec. 10) is central to how analysts are framing the stock today. In its official results announcement, Adobe reported:
- Q4 FY2025 revenue of $6.19 billion, up 10% year over year (as reported and constant currency)
- Q4 GAAP EPS of $4.45 and non-GAAP EPS of $5.50
- Q4 operating cash flow of $3.16 billion
- Remaining Performance Obligations (RPO) of $22.52 billion exiting the quarter
- ~7.2 million shares repurchased in the quarter [4]
For the full fiscal year:
- FY2025 revenue of $23.77 billion, up 11% year over year
- Total Adobe ARR of $25.20 billion exiting FY2025, up 11.5% year over year
- FY2025 operating cash flow of $10.03 billion
- ~30.8 million shares repurchased during the year [5]
The key metric Adobe is pushing: ARR growth “over 10%”
Adobe’s leadership explicitly tied its confidence to AI-driven product momentum and subscription economics, saying it is targeting double-digit ARR growth in FY2026. [6]
Importantly, Adobe also disclosed an ARR revaluation tied largely to foreign exchange. It said it revalued ending ARR at the end of FY2025, increasing Total Adobe ARR by $460 million, from $25.20 billion to $25.66 billion entering FY2026. [7]
That detail matters because investors tracking ARR (and net new ARR) often want to separate “operational momentum” from “currency and accounting effects.”
Adobe’s FY2026 forecast: revenue, subscription targets, ARR growth, EPS
Adobe provided unusually structured targets that reflect how it wants investors to judge the business in 2026—especially as it reorganizes reporting and guidance emphasis.
FY2026 targets (company guidance)
Adobe’s published FY2026 targets include:
- Total revenue: $25.90B to $26.10B
- Business Professionals & Consumers subscription revenue: $7.35B to $7.40B
- Creative & Marketing Professionals subscription revenue: $17.75B to $17.90B
- Total Adobe ending ARR growth:10.2% year over year
- EPS: GAAP $17.90 to $18.10; non-GAAP $23.30 to $23.50 [8]
A crucial caveat: Adobe said these targets do not include any contributions from its planned Semrush acquisition, which remains subject to approvals and closing conditions. [9]
Q1 FY2026 targets (company guidance)
For the first quarter of FY2026, Adobe guided to:
- Total revenue: $6.25B to $6.30B
- Business Professionals & Consumers subscription revenue: $1.74B to $1.76B
- Creative & Marketing Professionals subscription revenue: $4.30B to $4.33B
- EPS: GAAP $4.55 to $4.60; non-GAAP $5.85 to $5.90 [10]
How Wall Street is benchmarking the forecast
Reuters reported that Adobe’s FY2026 revenue and profit outlook came in above key Wall Street expectations tracked by LSEG, reinforcing the “fundamentals are holding up” case even amid AI disruption fears. [11]
The AI strategy behind the numbers: Firefly, freemium growth, and ChatGPT integration
Adobe says AI adoption is rising fast
A major question for Adobe stock in 2025 has been: Can Adobe monetize generative AI without training customers to expect “free” creativity? Adobe’s commentary and early indicators are designed to answer that with subscription-led confidence.
Reuters reported that Adobe has seen strong AI adoption, with monthly active users for its freemium offerings rising 35% year over year to more than 70 million, according to CFO Dan Durn. [12]
That’s strategically important because freemium funnels can expand the top of the customer pipeline—if Adobe can convert usage into durable ARR.
Photoshop and Acrobat move closer to where users are: inside ChatGPT
In one of Adobe’s most attention-grabbing product distribution moves of the year, Reuters reported that Adobe is integrating Photoshop, Adobe Express, and Acrobat into ChatGPT, enabling users to trigger Adobe features from within the chatbot interface. Reuters noted Adobe’s tools could reach ChatGPT’s 800+ million weekly active users, though users still need to register with Adobe to use the integrations. [13]
For Adobe stock bulls, this is a “distribution unlock” moment: Adobe’s tools become easier to discover and use in conversational workflows. For skeptics, the key question remains whether this kind of integration leads to incremental paid adoption—or simply increases usage without pricing power.
Semrush acquisition: a bet on AI-era marketing and search intelligence
Adobe’s planned acquisition of Semrush for $1.9 billion is widely viewed as part of a broader strategy to strengthen Adobe’s marketing and analytics position as search behavior evolves across traditional web search and generative AI assistants.
Reuters reported Adobe’s rationale: enhancing marketers’ ability to understand how brands are perceived through searches on websites and GenAI bots such as ChatGPT and Gemini. [14]
Adobe also told investors its FY2026 targets exclude Semrush contributions until the deal closes. [15]
Analyst forecasts and price targets: why Wall Street remains split on ADBE
The post-earnings analyst landscape around Adobe is best described as “mixed but active.” Firms are adjusting targets as they reassess ARR durability, competition, and AI investment costs.
Today’s headline change: Citi target raised to $387
As noted above, Citi moved its target up to $387 while keeping a Neutral stance. [16]
The cautious camp: downgrades and lowered targets on competitive pressure
- KeyBanc downgraded Adobe to Underweight with a $310 target, explicitly pointing to competitive pressures. [17]
- BMO Capital maintained an Outperform rating but trimmed its target to $400 from $405, citing competitive challenges (including lower-end users and AI applications). [18]
- Oppenheimer lowered its target to $430 from $460 (rating maintained at Outperform in the note), reflecting concerns including margin dynamics as Adobe invests in AI. [19]
- Evercore ISI reduced its target to $425 from $450, while keeping an Outperform rating, following FY2026 guidance. [20]
- UBS maintained a Neutral rating and $375 target after what it framed as in-line earnings. [21]
Where the “consensus” sits
MarketBeat’s compilation of analyst targets (as of its latest update) shows an average 12‑month price target around $417.93, with a wide range between the low end and high end—evidence of how uncertain the AI transition debate remains. [22]
One practical takeaway: even when analysts disagree on direction, the large dispersion in targets often signals that execution in the next 2–3 quarters (especially on AI monetization and net new ARR) can move the narrative quickly.
The new AI copyright lawsuit: what it could mean for Adobe stock sentiment
The SlimLM lawsuit reported by Reuters is not just a legal footnote—it plugs Adobe into the most sensitive, high-stakes debate in generative AI: whether companies can train models on copyrighted content without permission.
Even if Adobe ultimately prevails, investors typically worry about:
- Discovery risk (internal documentation becoming public)
- Cost and distraction for management
- The chance of settlements or licensing obligations that compress margins
- Potential limits on training data that slow future AI product releases
Reuters emphasized that Adobe did not immediately comment and that the lawsuit is part of a broader wave of AI-training copyright suits in the U.S. [23]
A quieter Adobe tailwind: its data business keeps producing market-moving retail reads
While not always a direct driver of ADBE stock day-to-day, Adobe Analytics continues to shape narratives about digital commerce health—particularly during the holiday season.
Forbes reported that e-commerce returns for holiday purchases were down 2.5% in early-season tracking from Adobe. [24]
And Reuters previously reported Adobe Analytics’ projection of record Cyber Monday spending earlier this month, highlighting how AI tools are influencing online shopping behavior. [25]
These reports reinforce Adobe’s positioning beyond pure creative software: it also provides data and tooling that sit close to real-time commerce and marketing decision-making.
What investors should watch next for Adobe (ADBE)
1) Next earnings date and FY2026 proof points
Adobe’s Investor Relations calendar lists its Q1 FY2026 earnings call for March 12, 2026. [26]
Between now and then, investors will likely focus on signals that Adobe is meeting its 10.2% ending ARR growth target trajectory. [27]
2) AI monetization: pricing discipline vs. user growth
Adobe has to thread a needle: expand adoption through AI-assisted workflows (including freemium funnels) while proving it can convert those users into paid tiers and durable ARR. Reuters’ “70 million+ freemium MAUs” data point gives bulls ammunition—but conversions and net new ARR will matter more than usage headlines. [28]
3) Legal and regulatory risk around training data
The SlimLM lawsuit could become a recurring headline, especially if other rights holders follow with similar claims. [29]
4) Semrush deal progress
Adobe’s FY2026 targets explicitly exclude Semrush until close, so investors may treat deal closure (and integration details) as a “bonus catalyst” rather than a base-case assumption. [30]
Bottom line for Adobe stock on Dec. 18, 2025
Adobe stock is effectively trading at the intersection of strong subscription fundamentals and a high-stakes AI transition—with an added layer of legal uncertainty after a new copyright lawsuit allegation tied to AI model training.
The company’s FY2026 guideposts are clear and measurable—revenue of $25.90B–$26.10B, non-GAAP EPS of $23.30–$23.50, and 10.2% ending ARR growth—and Adobe is increasingly framing its investment case around ARR durability and AI-driven workflow expansion. [31]
At the same time, today’s analyst landscape (Citi’s target raise to $387 but Neutral, KeyBanc’s downgrade to Underweight, and multiple target trims across the Street) shows that many institutions still want more proof that Adobe can monetize AI at scale while defending its creative-software leadership. [32]
References
1. www.gurufocus.com, 2. www.reuters.com, 3. www.marketwatch.com, 4. www.adobe.com, 5. www.adobe.com, 6. www.adobe.com, 7. www.adobe.com, 8. www.adobe.com, 9. www.adobe.com, 10. www.adobe.com, 11. www.reuters.com, 12. www.reuters.com, 13. www.reuters.com, 14. www.reuters.com, 15. www.adobe.com, 16. www.gurufocus.com, 17. www.investing.com, 18. www.investing.com, 19. www.investing.com, 20. www.investing.com, 21. au.investing.com, 22. www.marketbeat.com, 23. www.reuters.com, 24. www.forbes.com, 25. www.reuters.com, 26. www.adobe.com, 27. www.adobe.com, 28. www.reuters.com, 29. www.reuters.com, 30. www.adobe.com, 31. www.adobe.com, 32. www.gurufocus.com
