Adobe (NASDAQ: ADBE) stock is trading near the mid-$350s on Thursday, as investors balance a strong fiscal Q4 and upbeat FY2026 targets against a noisy mix of fresh analyst target changes, intensifying AI-era competition concerns, and a newly reported copyright lawsuit tied to AI training data. [1]
At last check, Adobe shares were around $355.67, up modestly on the session, with an intraday range roughly $351 to $358—a sign that the market’s debate hasn’t resolved, even after the company’s latest earnings beat and AI product push. [2]
Adobe stock price today: where ADBE stands on Dec. 18, 2025
Adobe stock was last quoted at $355.67 (+0.28%) on the day, with a 52-week range of about $311.58 to $465.70. [3]
In the past week, price action has been volatile—typical for a mega-cap software name trying to re-rate during a platform shift (from “classic SaaS growth story” to “AI monetization story”). Recent daily closes show the stock rebounding from the low-$340s after the earnings release and then consolidating around the mid-$350s. [4]
One reason the market is still stuck in “prove it” mode: even with a solid quarter, Adobe shares have still been down sharply on the year, with Barron’s noting a roughly 23% year-to-date decline around the earnings window—an underperformance that keeps expectations and scrutiny high going into 2026. [5]
The biggest headline risk: Reuters reports an AI training copyright lawsuit against Adobe
A new legal overhang is also entering the picture.
Reuters reported on Dec. 17 that Adobe has been hit with a proposed class action alleging its AI tools were trained on writers’ copyrighted works without permission. The complaint—filed by author Elizabeth Lyon—alleges Adobe used pirated copies of books to train its “SlimLM” small language models, and seeks unspecified monetary damages. Reuters described it as the first copyright infringement case targeting Adobe over AI training. [6]
For investors, this matters less for immediate financial impact (it’s early-stage litigation) and more for what it signals: AI training-data governance is becoming a real, recurring risk vector across the sector—one that can show up as legal cost, product constraints, reputational pressure, or simply a discount on valuation multiples.
Wall Street forecast snapshot: consensus stays “Buy,” but the spread is wide
Despite the push-and-pull, sell-side sentiment is still constructive in aggregate.
Investing.com’s consensus snapshot shows an overall “Buy” stance, with 25 Buy, 11 Hold, and 4 Sell ratings, and an average 12-month price target around $430.96 (about 21% upside from the mid-$350s). [7]
But the range of targets is striking: analysts’ targets span roughly $270 on the low end to $605 on the high end—a wide dispersion that reflects how differently firms are modeling (and believing) Adobe’s AI transition. [8]
Citi raises target (but stays neutral)
One of the target changes circulating today: Citi analyst Tyler Radke raised Adobe’s price target to $387 from $366, while keeping a Neutral rating. [9]
That kind of move—higher target, same rating—often reads as “fundamentals are improving, but we’re not ready to call a clean re-rating yet.”
The bearish counterpoint: a high-profile downgrade on competition fears
On the other end of the spectrum, Investing.com reported that KeyBanc downgraded Adobe to Underweight, setting a $310 price target, citing concerns about competitive pressures and pointing to guidance that implied flat net-new ARR in 2026 and EBIT margin contraction. [10]
Whether investors agree with that conclusion or not, it’s a clear articulation of the bear case: AI is lowering barriers, rivals are moving fast, and Adobe may have to spend more (and/or price more carefully) to defend its moat.
“Good quarter, tougher optics”: why multiple firms trimmed targets anyway
Several other research takes are essentially variations of: “The quarter was strong, but the path for 2026 isn’t a straight line.”
- Investing.com noted Oppenheimer lowered its target to $430 from $460 while keeping an Outperform view, highlighting strong AI-derived ARR trends but flagging that FY2026 guidance implies high single-digit revenue growth and softer operating margins. [11]
- TipRanks summarized a similar wave of trims, citing Evercore ISI cutting to $425, and Jefferies cutting to $500, largely tied to margin concerns as Adobe ramps AI investment. [12]
- Investing.com also reported BMO Capital reduced its target to $400 (from $405) while staying Outperform, explicitly pointing to competitive challenges—especially around lower-end users and AI applications. [13]
Put simply: many analysts still like the franchise, but want cleaner proof of monetization and durability before pushing targets back toward prior-cycle highs.
Adobe’s own forecast: record FY2025, and FY2026 targets centered on ARR growth
The company’s fundamentals, at least in the reported numbers, remain strong.
In its FY2025 earnings release, Adobe reported:
- Q4 FY2025 revenue of $6.19 billion (+10% year over year)
- Q4 non-GAAP EPS of $5.50 (GAAP EPS $4.45)
- FY2025 revenue of $23.77 billion (+11% year over year)
- FY2025 non-GAAP EPS of $20.94 (GAAP EPS $16.70) [14]
Adobe also emphasized its transition to a more ARR-centered way of talking about the business. For FY2026, Adobe guided to:
- Total revenue: $25.90B–$26.10B
- Total Adobe ending ARR growth: 10.2% year over year
- Non-GAAP EPS: $23.30–$23.50 (GAAP EPS $17.90–$18.10) [15]
For Q1 FY2026 specifically, Adobe guided:
- Revenue: $6.25B–$6.30B
- Non-GAAP EPS: $5.85–$5.90 [16]
A key nuance investors are watching closely: Adobe is essentially telling the market to follow ending ARR growth (and customer-group subscription revenue) as primary signals—metrics meant to track durability and monetization more directly in an AI-driven product cycle. [17]
AI adoption: growth signals are there, but the market wants monetization clarity
Adobe’s AI story is not theoretical anymore—it’s live inside products and increasingly visible in usage metrics.
Reuters reported that Adobe is seeing strong AI adoption, with monthly active users for its freemium offerings rising 35% year over year to over 70 million, citing comments from CFO Dan Durn. [18]
That usage growth matters because Adobe’s emerging AI playbook relies heavily on:
- expanding top-of-funnel usage with freemium models, and
- converting into higher-value subscriptions or paid add-ons as workflows deepen.
Still, the market’s central question remains: does AI increase Adobe’s pricing power and retention—or does it accelerate competition and compress margins?
Barron’s captured this divide bluntly: Wall Street is still split on whether AI is ultimately a blessing or a curse for Adobe’s competitive position, even after the earnings beat. [19]
Product catalyst: Adobe expands Firefly with video editing features and partner models
In the days after earnings, Adobe also kept shipping product updates—important because, in 2026, the “multiple” investors assign to Adobe may increasingly track AI feature velocity and conversion economics.
Adobe announced new Firefly updates that add more control to AI video creation, including a browser-based Firefly video editor and new capabilities designed to make AI video outputs more editable (not just “prompt and pray”). [20]
Adobe also disclosed that, from Dec. 16, 2025 to Jan. 15, 2026, subscribers to select Firefly plans will receive unlimited generations across AI image models and the Firefly Video model in Firefly web/mobile apps and Firefly Boards. [21]
For Adobe stock watchers, these updates function as near-term evidence that:
- Adobe is investing to keep creators inside its ecosystem, and
- it’s willing to use promotional levers (like unlimited generations) to drive adoption—potentially trading some near-term unit economics for longer-term retention and conversion.
That’s bullish for engagement, but it also helps explain why multiple analysts keep circling back to margin optics: aggressive AI investment (and AI-related incentives) can pressure profitability before monetization scales.
Semrush acquisition: strategic bet to strengthen AI-era marketing workflows
Another strategic thread investors are tracking is Adobe’s move deeper into marketing intelligence tied to AI search behavior.
Reuters reported that Adobe will acquire Semrush for $1.9 billion, paying $12 per share in cash, with the deal expected to close in the first half of next year. Reuters framed the deal as a way for Adobe to strengthen marketing tools and help brands understand visibility across traditional search and generative AI bots (such as ChatGPT and Gemini). [22]
Notably, Adobe’s FY2026 targets do not include contributions from Semrush (subject to regulatory approvals and closing conditions), so investors may view upside from the deal as incremental to the baseline guidance—if integration and monetization go well. [23]
Adobe stock forecast: the 2026 “make-or-break” debates investors are actually trading
If you strip away the day-to-day headlines, Adobe stock is largely trading on a few high-conviction questions that should define 2026:
1) Can Adobe turn AI usage into durable ARR growth—and do it fast enough?
Adobe is explicitly targeting double-digit ending ARR growth for FY2026. The market will likely demand evidence that AI features drive measurable net retention and paid expansion, not just engagement. [24]
2) Does AI competition erode the low end—or expand the overall category?
Some analysts argue AI proliferation makes it easier for rivals to win contracts and pressure Adobe’s multiple, which is why competition concerns keep resurfacing even after a strong quarter. [25]
3) Will margins trough in 2026—or keep sliding?
Multiple target cuts have been tied to margin optics as Adobe invests in AI. Bulls can accept a margin dip if it buys durable leadership; bears see it as evidence of weakening pricing power. [26]
4) How big is the legal and reputational overhang around AI training data?
The newly reported AI-training lawsuit may be early, but it’s a reminder that regulatory and IP risk is now part of the AI investment equation—not just product execution. [27]
5) Capital return and cash flow still matter
Adobe reported over $10 billion in operating cash flow in FY2025 and significant share repurchases, which can help support the stock during periods of narrative volatility. [28]
What to watch next for Adobe stock
Investors don’t have to wait long for the next major checkpoint: Adobe’s investor relations calendar lists the Q1 FY2026 earnings call on March 12, 2026. [29]
Between now and then, the most market-moving signals are likely to be:
- early read-throughs on FY2026 ARR trajectory and subscription revenue trends (under Adobe’s updated reporting emphasis), [30]
- evidence that Firefly (including new video features) is translating into paid adoption rather than promotional-only engagement, [31]
- clarity on competitive positioning (especially in lower-end creative use cases), [32]
- and any updates on the AI training lawsuit or other IP-related developments that could impact AI roadmap risk. [33]
This article is for informational purposes only and is not investment advice.
References
1. www.investing.com, 2. www.investing.com, 3. www.investing.com, 4. www.investing.com, 5. www.barrons.com, 6. www.reuters.com, 7. www.investing.com, 8. www.investing.com, 9. www.streetinsider.com, 10. www.investing.com, 11. www.investing.com, 12. www.tipranks.com, 13. www.investing.com, 14. www.adobe.com, 15. www.adobe.com, 16. www.adobe.com, 17. www.adobe.com, 18. www.reuters.com, 19. www.barrons.com, 20. blog.adobe.com, 21. helpx.adobe.com, 22. www.reuters.com, 23. www.adobe.com, 24. www.adobe.com, 25. www.investing.com, 26. www.investing.com, 27. www.reuters.com, 28. www.adobe.com, 29. www.adobe.com, 30. www.adobe.com, 31. blog.adobe.com, 32. www.investing.com, 33. www.reuters.com
