New York, January 9, 2026, 20:54 EST — Market closed
- Adobe shares closed down 1.5% after BMO cut its rating to Market Perform
- BMO lowered its price target to $375 and flagged tougher Creative Cloud competition
- Traders look next to Tuesday’s U.S. CPI and Adobe’s March 12 earnings call
Adobe shares ended down 1.5% at $333.95 on Friday, after trading between $328.00 and $340.44, following a downgrade by BMO Capital Markets. The broker cut the Photoshop maker to Market Perform from Outperform and lowered its price target to $375 from $400, saying its latest Creative Cloud survey showed competition rising among students, freelancers and smaller businesses. “We do not envision a clear catalyst for the stock,” BMO analyst Keith Bachman wrote, flagging risks to pricing power and high-end seat growth. 1
The call lands at an awkward moment for software investors. Generative AI is making basic design work cheaper and faster, and it is widening the field of tools that can sit alongside — or instead of — Adobe.
For Adobe, the scorecard is still plain: subscription growth, price, and annual recurring revenue, or ARR — the annualized value of active subscriptions. Seat growth, Wall Street shorthand for the number of paying users, matters because small shifts in adoption can compound quickly.
BMO also pointed to pressure from newer creative tools, with Canva gaining users among students and freelancers, according to a separate report. In front-office software, the broker said it preferred HubSpot and Salesforce over Adobe. 2
Adobe last set fiscal 2026 targets in December, projecting revenue of $25.90 billion to $26.10 billion and adjusted profit of $23.30 to $23.50 per share. “We’re seeing significant strength in Creative Cloud Pro, Photoshop, Lightroom,” CFO Dan Durn told Reuters at the time, pointing to embedded generative AI as a driver of adoption. 3
Before the next session, traders will have a rate check that often ripples through big-cap tech: December CPI is due on Tuesday, Jan. 13 at 8:30 a.m. ET. A hotter print can push Treasury yields higher and weigh on longer-duration software names. 4
But analyst surveys can lag product cycles, and sentiment can turn quickly on one data point. If Adobe shows clearer uptake of paid AI features or holds renewals steady while keeping price increases intact, Friday’s downgrade could fade; a stumble in high-end customer additions would cut the other way.
Adobe’s next hard date is its first-quarter fiscal 2026 earnings call on March 12 at 2:00 p.m. Pacific, according to the company’s investor relations calendar. Investors will be listening for signs that AI features are lifting subscription demand and that competitive pressure is not bleeding into renewals. 5
