New York, Feb 4, 2026, 19:33 EST — After-hours
- Adobe shares climbed roughly 2.9% during Wednesday’s regular trading and held steady in after-hours action.
- Shares in the software sector have swung sharply as investors debate if emerging AI tools pose a risk to subscription-based revenue.
- An analyst downgrade and Adobe’s latest product announcements sharpen focus on the March 12 earnings call.
Adobe shares climbed 2.9% during Wednesday’s regular session, then held steady after hours, last checking in at $279.86. The stock traded between $264.04 and $282.90 throughout the day and remains close to the lower end of its 52-week range. After-hours trading occurs outside the main 9:30 a.m. to 4 p.m. New York window. (Investing)
The selloff in software and data-analytics stocks followed fresh concerns that generative AI might erode pricing power. One catalyst was Anthropic’s launch of plug-ins for its Claude Cowork agent late last week. IG chief markets strategist Chris Beauchamp summed it up, saying AI was “parking its tanks on their lawn.” (Daily Sabah)
Adobe finds itself in a tough spot. Investors demand clear evidence that AI features are attracting new paid users, rather than just driving more usage from existing ones. The market has been quick to punish anything resembling “good tech, weaker pricing.”
Analyst caution remains. Piper Sandler downgraded Adobe to Neutral from Overweight, slashing its price target to $330 from $470. The firm flagged “seat compression”—fewer paid licenses as AI drives higher productivity—and warned that “vibe coding” narratives might limit valuation multiples. (TipRanks)
Adobe is ramping up its product lineup to match that trend. On Feb. 2, it announced that Firefly subscribers now get unlimited image and video generations, plus access to various AI models within the Firefly app—not just Adobe’s proprietary Firefly models. (Adobe Blog)
This week, the company reversed its earlier plan to discontinue Adobe Animate. The app will enter “maintenance mode,” meaning only security patches and bug fixes will continue — no new features. Adobe confirmed it has “no plans to discontinue or remove access” and that there is “no longer a deadline” for its availability. (Adobe Help Center)
The reversal came after a public backlash over an earlier email announcing the discontinuation, The Verge reported. An Adobe community team member admitted the message “did not meet our standards” and sparked “confusion and angst.” (The Verge)
Adobe projected fiscal 2026 revenue and profit will surpass Wall Street expectations in December, driven by strong demand for its design tools and growing use of Firefly, now integrated throughout its Creative Cloud suite. (Reuters)
That relief in the stock might be short-lived if investors start betting that the latest AI surge will drive prices down, or if clients bundle licenses and tighten spending per user. A weaker subscription outlook for March could easily trigger another sell-off.
Adobe’s fiscal first-quarter earnings call is set for March 12 at 2:00 p.m. Pacific time. Investors will be tuning in for clues on AI monetization, shifts in demand, and if the recent sector turbulence is changing buying patterns. (Adobe)
