Wall Street Gives Adobe's AI Future A Thumbs-Up, But Investors Sell The Stock Anyway

Adobe Inc (NASDAQ:ADBE) unveiled sweeping artificial intelligence advancements and a new growth framework at its annual MAX conference.

The company introduced new AI tools—including Firefly Foundry and an AI Assistant for Adobe Express—designed to help creators build custom generative models. Its products also automate content production and unlock new revenue from digital assets.

JPMorgan analyst Mark R Murphy maintained an Overweight rating on Adobe with a price forecast of $520.

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Murphy said Adobe showcased a significant leap in innovation and AI integration at its annual MAX conference in Los Angeles, reaffirming its fiscal 2025 outlook and outlining a new framework for 2026 guidance.

The analyst noted a more unified and ambitious vision for the AI-driven content lifecycle compared to previous years.

He highlighted the new Total ARR guidance framework, which shifts focus toward customer segments—Business Professionals & Consumers and Creative & Marketing Professionals. It offers investors transparency into growth drivers across the company's ecosystem. Adobe plans to eventually release historical data for 2024 and 2025 to enhance transparency.

Firefly Foundry enables enterprises to build custom, brand-specific generative AI models trained on proprietary intellectual property. Murphy views this as a competitive advantage. Adobe helps businesses commercialize and scale assets across image, video, audio, and 3D content.

The analyst also noted the introduction of AI Assistant in Adobe Express, which brings conversational AI tools to creative professionals.

Murphy added that Adobe continues to strengthen its ecosystem through new features. This includes:

• Project Moonlight, an AI-driven social media assistant;
• Project Graph, a workflow-mapping tool; and
• Generate Soundtrack, a music creation feature within Firefly.

Murphy projected fourth-quarter revenue of $6.1 billion and adjusted EPS of $5.37.

Price Action: ADBE stock is trading lower by 5.50% to $340.15 at last check on Wednesday.

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