Adobe (ADBE) shares fell 1.35% to $292.13 in the afternoon trade on Tuesday, extending losses for a seventh consecutive session.
The stock fell 11.33% between January 9 and January 16, as compared with a 0.38% decline in the S&P 500 over the same period.
Adobe shares have come under pressure following a series of broker downgrades that highlighted rising competition, slowing growth and a lack of near-term catalysts.
BMO Capital Markets cut the stock to Market Perform, citing increasing competitive threats in the creative software market and survey data showing wider adoption of rival Canva among students and freelancers. Jefferies also downgraded Adobe to Hold, saying it has not seen any clear revenue contribution from the company’s artificial intelligence tools. Oppenheimer later downgraded the stock to Perform, pointing to decelerating Digital Media growth, inconsistent execution, durability concerns around Adobe’s moat and lower year-on-year operating margin guidance for fiscal 2026.
The downgrades came as broader weakness weighed on enterprise software stocks, with investors growing cautious about how artificial intelligence could disrupt traditional software business models.
Reports said renewed AI-related fears have driven sharp declines across the software sector, with Adobe and peers falling alongside other enterprise names. Commentators said many incumbents have yet to show meaningful revenue acceleration from their AI initiatives, leaving sentiment weak and near-term upside limited despite lower valuations.
According to Seeking Alpha’s Quant rating system, Adobe is rated Hold, with a score of 2.94 out of 5, with grades of A+ in profitability and B- in valuation, but a C in revisions, D in growth and D+ in momentum.
While Seeking Alpha analysts suggest buying the stock.
Turning to Wall Street, 21 out of 40 analysts rate the stock Buy or higher, 14 suggest Hold, while five rate it a Strong Sell.
An analyst said recent share price declines have made Adobe attractive for growth-focused investors, citing continued double-digit growth and resilient profitability despite near-term margin pressure. They said, “the most recent growth figures and the forecasted growth for the coming year are still appealing,” adding that Adobe “keeps innovating, and the traction seems to be real across each of the segments in all geographies,” while arguing the stock is trading “at a significant discount compared to its 5-year historic averages.”
Shares have fallen 18.14% over the past month and are down 16.67% year to date.