New York, Feb 3, 2026, 15:21 EST — Regular session
- Adobe shares dropped roughly 7% in afternoon trading, deepening the sell-off in software stocks
- Anthropic’s latest AI legal tool has reignited concerns over competition and shrinking margins throughout the industry
- Adobe will report earnings on March 12, providing a crucial update on demand and how it’s monetising AI
Adobe shares dropped Tuesday amid a late-session surge in selling across software stocks.
The Photoshop maker dropped $20.76, roughly 7.1%, to $272.62 in afternoon trading, having hit a session low of $271.11 earlier.
The sell-off hit software stocks hard, with investors questioning if artificial intelligence might shake up the competitive landscape sooner than anticipated. “We’re looking at a lot of software names … that may well be disrupted,” said Art Hogan, chief market strategist at B. Riley Wealth. Reuters
This is crucial now as the “AI winners” trade faces scrutiny during a packed earnings week, with investors growing hesitant to overpay for long-term growth plays vulnerable to being replicated or undercut. Generative AI churns out text, images, and code, raising concerns it could erode the value of previously reliable tools.
Traders and analysts pointed to Anthropic’s rollout of a legal plug-in for its Claude chatbot as a key trigger, fueling the debate over AI shifting from infrastructure to direct rivalry with established software and data providers. “The software companies were assumed to be winners from AI,” noted Lars Skovgaard, senior investment strategist at Danske Bank. Reuters
Adobe grabbed headlines this week with a focused update. Starting March 1, new customers won’t be able to download Adobe Animate anymore. Support will continue until 2027 for most users, while enterprise clients get an extended runway until 2029.
Shareholders are gearing up for Adobe’s fiscal 2026 Q1 earnings call on March 12. The key focus: whether demand remains steady and if AI tools are genuinely boosting sales instead of just inflating expenses.
Risks remain. Rapid advances in AI tools might ramp up price pressure across segments of Adobe’s creative and document software lines, with some customers holding off on upgrades to try out less expensive options. And a barrage of headlines can drown out the company’s core fundamentals for extended stretches.
Traders remain keyed in on whether the software sector can steady before the close and what upcoming tech earnings reveal about spending and rivalry. For Adobe, the next major date is March 12.
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