New York, Feb 5, 2026, 14:55 EST — Regular session
- Adobe shares dropped roughly 3.5% as software stocks continued to slide amid the AI-driven selloff
- Piper Sandler downgraded Adobe to “neutral” and lowered its price target earlier this week
- Attention turns to Adobe’s earnings call on March 12, searching for new clues on demand and AI returns
Adobe shares dropped roughly 3.5% to $270.01 in Thursday afternoon trading, moving between $269.24 and $282.00 earlier in the session. The stock slipped $9.70 from Wednesday’s close at $279.71.
Software and data-services stocks took another hit, tumbling as investors debate whether rapidly advancing AI tools might disrupt subscription models. The S&P 500 software and services index dropped 2.8%, set to erase more than $950 billion in market value since Jan. 28. ServiceNow declined 4%, Salesforce lost 3.3%, and Microsoft slid 2.6%. “Near-term earnings results will be important signals of business resilience,” said Goldman Sachs’ chief U.S. equity strategist Ben Snider. Reuters
Tech stocks struggled across the board. Alphabet dropped after revealing plans to spend up to $185 billion on AI in 2026, reigniting concerns about when heavy industry investments will start paying off. Amazon also slipped ahead of its earnings report due later. “The AI trade which was the accelerant last year is perhaps the extinguisher this year,” said Melissa Brown, SimCorp’s managing director of investment decision research. Reuters
Sector jitters reignited earlier this week when AI startup Anthropic rolled out plug-ins for its Claude Cowork agent, automating tasks in legal, sales, marketing, and data analysis, according to traders and analysts. “Sometimes the market just shoots first and asks questions later,” said Mike Archibald, a portfolio manager at AGF Investments. Reuters
Adobe took a sharp hit on Tuesday, dropping roughly 7%, as a broader sell-off slammed software stocks. Salesforce and Datadog also fell around 7%, while Intuit tumbled 11%. “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
Broker chatter intensified the selling pressure. On Feb. 3, Piper Sandler downgraded Adobe from “overweight” to “neutral” and slashed its price target to $330 from $470, according to a Reuters research roundup. Sahm
Analysts use “overweight” to indicate they expect a stock to outperform its benchmark. A “neutral” rating suggests the stock will perform about in line. Price targets reflect where analysts see shares heading over the next year, not in the coming days.
Adobe’s outlook remains unchanged this week, yet investors see the upcoming earnings report as a key test. In its last quarterly update, the company projected fiscal 2026 revenue between $25.90 billion and $26.10 billion, with adjusted EPS ranging from $23.30 to $23.50. It also set guidance for first-quarter revenue at $6.25 billion to $6.30 billion.
The bigger risk for the group isn’t just next quarter. It’s whether AI enables customers to get more done with fewer paid seats, putting pressure on recurring revenue despite higher usage. This issue has already sparked a sharp valuation reset and could keep the debate heated.
Adobe’s upcoming fiscal first-quarter earnings call is set for March 12, according to its investor relations calendar. Investors will focus on product demand, pricing trends, and whether Adobe can demonstrate tangible gains from its AI investments, all while the software sector faces ongoing headwinds.
