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Image from the main stage at Adobe MAX 2016, Shantanu Narayen, CEO.

Adobe Report Plummeted Double Digits - Market Concerns Over AI Investment

Adobe exceeded earnings expectations but concerns over the company's AI investments dragged the stock down by nearly 14 percent.

Calle Rosenqvist
CALLE@KAMERABILD.SE
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Adobe has released its quarterly report showing a profit of $5.71 billion - which is a record according to Adobe itself and above the market's expectations of $5.66 billion.

Despite this, the stock dropped by nearly 14 percent before it closed after Thursday's trading the day after the report was released. The reason is that the market now doubts the company's AI investments and concerns that Adobe is lagging behind its competitors. 

“We are not only integrating AI into our existing products and creating value, but it is also clear that the innovation we have delivered is creating new revenue streams,” announced Adobe's CEO Shantanu Narayen regarding the future of AI development at Adobe. 

According to him, the company's revenue from AI specifically is expected to double during the fiscal year 2025, even though analysts want to see "a clearer roadmap" for Adobe's investments.

The stock closed down 13.85 percent, which means the stock value is now at the same level as two years ago, in May 2023.

In June 2024, just a week after Adobe chose to reshape its terms after receiving harsh criticism for requiring access to users' materials - the company released its report for the second quarter of the broken fiscal year. At that time, the stock was up 16.1 percent in after-hours trading on the report day and closed up 14.51 percent the day after. Since then, the price has dropped 28 percent.

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