New York, Jan 20, 2026, 19:29 EST — After-hours
- Adobe shares dropped close to 2% on Tuesday, lingering near the low end of their 52-week range
- The company unveiled new AI video tools and emphasized creator funding just before Sundance
- Traders want a sharper view on AI monetization and demand in the upcoming earnings report
Adobe Inc (NASDAQ:ADBE) shares dropped close to 2% on Tuesday, hovering just above their 52-week low amid ongoing selling pressure in the software sector. The stock hit $288.37 during the session and was last seen at $290.37 in after-hours trading. (Bloomberg)
Adobe’s slide stretched to a seventh session, pushing the stock roughly 38% below its 52-week peak. Still, it fared better than some other mega-cap tech names during a tough day for U.S. equities. Volume reached about 6.9 million shares, topping its 50-day average of 4.1 million, according to MarketWatch data. (MarketWatch)
Adobe’s latest move has turned it into a proxy for a wider debate in tech: does generative AI boost software demand, or undercut it by automating jobs more cheaply? Jordi Visser of 22V Research cautioned that battered software stocks might actually be “value traps.” He told Benzinga, in a report picked up by Finviz, “This isn’t a typical sector rotation.” (Finviz)
Adobe is stepping up its AI game. Ahead of the Sundance Film Festival, the company detailed fresh AI video features for Premiere and After Effects. It also announced a closer integration between Premiere and Firefly Boards, an ideation platform that leverages models from partners like Google, OpenAI, and Runway. “We’re committed to advancing AI video tools,” said Deepa Subramaniam, Adobe’s vice president of product marketing for creative professionals. (Adobe Newsroom)
Adobe, known for Photoshop and Acrobat, has been pitching Firefly and other AI tools as a way to boost user engagement and increase subscription sales. In December, the company projected fiscal 2026 revenue between $25.90 billion and $26.10 billion, with adjusted earnings per share of $23.30 to $23.50—both figures surpassing Wall Street’s expectations, Reuters reported. (Reuters)
Yet, the market’s attention has zeroed in on timing and trade-offs. Investors are pressing on how fast AI capabilities will convert into actual billings, and if ramped-up spending alongside stiffer competition might tighten margins, the Wall Street Journal reported. (Wall Street Journal)
Tuesday’s low has turned into a key marker for short-term traders. If the stock slips below the $288 mark, it could dive into new lows, putting recent selling pressure to the test.
On the flip side, stabilisation probably demands more than just another feature rollout. Investors are looking for clearer signals on pricing, paid adoption, and whether AI tools help drive renewals instead of pushing customers toward cheaper options.
At the moment, the stock feels more like a gauge of software sentiment. Adobe is touting AI enhancements and partner models, yet investors remain focused on who ultimately controls the economics as creation speeds up and costs drop.
Adobe’s first-quarter fiscal 2026 earnings call is set for March 12. Investors will be watching closely for signs of demand strength and whether the company is making headway in converting AI features into steady revenue streams. (Adobe)
