March 14, 2025 – Adobe’s shares dropped by 8.6% today, reaching their lowest level since May 2023. This decline followed the company’s announcement on Wednesday of its second-quarter revenue guidance, which is expected to range between 5.77billionto5.82 billion, aligning with market expectations.
According to Reuters, Adobe is confronting fierce competition from startups while making slow progress in monetizing its AI products. Despite this, the company has reiterated its full-year revenue target, with the CEO asserting that Adobe is well-positioned to “leverage AI to accelerate the development of the creative economy.”
The primary concern for the market is when Adobe will be able to expedite the monetization of its generative AI products. Adobe responded by stating that the company is investing heavily to integrate more powerful AI editing tools into its product line, striving to maintain its competitive edge.
DA Davidson analyst Gil Luria noted, “Although investors still have doubts about Adobe’s AI transformation, market sentiment is expected to shift from concern to anticipation as the company continues to launch new products.” Meanwhile, M Science’s senior research analyst Park Snook commented, “Adobe’s guidance is not particularly impressive, and people are questioning whether Adobe’s AI monetization speed is sufficient.”
