New York, Jan 6, 2026, 14:25 EST — Regular session
Adobe Inc shares rose in afternoon trading on Tuesday, even after Jefferies cut its rating a day earlier, keeping the market’s focus on how fast the software maker can turn generative AI into paid growth. The stock was up 0.8% at $334.19 after swinging between $329.20 and $336.30.
The move matters because Adobe’s valuation debate has narrowed to one question: will AI features lift revenue, or mainly defend share against cheaper tools that are spreading across creative work. A downgrade from a large brokerage can amplify that test early in the year, when investors tend to reset positions and assumptions. 1
For Adobe, the stakes are high. If AI becomes a standard feature across creative apps, pricing power and upgrade rates — the levers that drive subscription growth — are what traders will watch, not product demos.
Jefferies downgraded Adobe to “Hold” from “Buy” on Monday and cut its price target — an analyst’s estimate of where a stock could trade over the next 12 months — to $400 from $500. Analyst Brent Thill wrote that “any contribution boost from AI has yet to show up,” adding he still saw “no AI inflection,” meaning no clear turn to faster growth. 2
Adobe’s rebound came as U.S. equities ticked higher and investors looked ahead to labor-market data, including Friday’s U.S. nonfarm payrolls report. The tech-heavy QQQ was up 0.8% and software-focused IGV rose 0.9%, broadly supporting large-cap software names. 3
Adobe last updated investors in December, when it forecast fiscal 2026 revenue of $25.90 billion to $26.10 billion and adjusted earnings per share of $23.30 to $23.50, above Wall Street expectations at the time, citing demand for its design tools and growth in its AI offerings. 4
On the chart, the stock remains closer to its 52-week low of $311.58 than its 52-week high of $465.70, keeping attention on whether recent dips draw buyers or signal another leg down. 5
A key risk is that AI-enhanced alternatives at the low end of the market chip away at Adobe’s ability to raise prices or convert casual users into higher-tier plans, while tighter budgets could slow spending on its marketing software. Jefferies pointed to growing competitive pressure and longer-term disruption fears in its downgrade. 6
Investors’ next clear checkpoint is Adobe’s first-quarter fiscal 2026 earnings call on March 12, when guidance and any AI-related revenue signals will be back under the microscope. 7
