New York, Jan 13, 2026, 14:40 EST
- Adobe dropped roughly 6% in afternoon trading following a fresh analyst downgrade
- Oppenheimer pointed to a challenging 2026 outlook for software apps, coupled with a more gradual AI payoff
- Goldman Sachs flipped bearish this week, ramping up the selling pressure
Adobe shares dropped Tuesday following a downgrade from Oppenheimer, marking another cautious note among recent calls that have pressured the stock this month. By afternoon, shares had fallen 5.7% to $309.02.
The downgrade hits at a crucial moment for Adobe, perched on the edge of the AI trade. Investors crave quicker returns from generative-AI features, but analysts are zeroing in on whether these new tools could open the door for competitors to chip away at Adobe’s core business.
Oppenheimer called the 2026 outlook for application software “challenging,” noting the sector has underperformed the S&P 500 and Nasdaq for four years running. The firm highlighted that software has fallen behind other tech areas in converting AI advances into revenue. It also said the anticipated growth from Adobe’s AI-driven Digital Media segment “did not play out as we expected,” citing rising competition from AI specialists like Midjourney and OpenAI. Investing.com Australia
Oppenheimer’s Brian Schwartz downgraded Adobe from Outperform to Perform. This rating usually signals a stock expected to move in line with the market, rather than outperform it. Schwartz called Adobe “cheap” with “good medium-term opportunities,” but pointed to slowing revenue growth and limited near-term upside amid the AI transition. TipRanks
Oppenheimer shifted its stance on other large-cap software stocks, signaling a move away from them. The firm now favors more thematic or cyclical plays, highlighting names like Microsoft, Salesforce, and ServiceNow.
According to Bloomberg, analyst sentiment on Adobe has soured to its lowest point since 2013.
Earlier this month, Jefferies set the tone when analyst Brent Thill downgraded Adobe, telling clients that investors might “need to stay patient” before seeing real AI-driven revenue growth. The firm noted that “any contribution boost from AI has yet to show up” and maintained there was still “no AI inflection.” Investing.com
Goldman Sachs turned bearish on Adobe Monday, cutting the rating from Buy to Sell and slashing the price target to $290. Analyst Gabriela Borges flagged risks to earnings growth if Adobe ramps up AI spending or if revenue growth slows due to weaker pricing power amid a flood of AI tools.
BMO Capital Markets downgraded Adobe last week. Analyst Keith Bachman noted that “creative market competitive dynamics are increasing,” particularly among smaller businesses, students, and freelancers. He highlighted rivals like Canva and Alphabet as growing threats. Barron’s
The call isn’t one-sided. Should Adobe demonstrate a solid link between its AI features and steady subscription growth—while holding onto pricing power and margins—the “too early, too messy” worries fueling the downgrades might ease. On the flip side, if competition heats up faster than revenue gains, the stock could stay weighed down by reduced expectations and limited room for error.
