Adobe stock falls as AI monetization timeline raises concerns

Analysts cited rising competitive pressure and growing uncertainty over how quickly Adobe can monetize AI features in core products like Photoshop and Premiere Pro, raising concerns about delayed returns and intensifying GenAI competition

Creative software giant Adobe witnessed its shares plunge by 7% in early trading on Friday (June 13) as investors expressed caution over the timeline for the company's artificial intelligence (AI) initiatives to deliver financial gains. The drop came despite the company raising its full-year revenue forecast for 2025.

Analysts pointed to growing competitive pressure and uncertainty around the pace of AI integration and monetization across Adobe’s flagship products, including Photoshop and Premiere Pro. “There are increasing concerns about competitive threats and the extended timeline to realize substantial returns from AI,” noted Angelo Zino, senior equity analyst at CFRA Research.

Adobe bets big on AI

Adobe has been actively incorporating generative AI capabilities into its product suite. In April, the company announced that its Firefly tool would integrate models from OpenAI and Google, enabling users to generate and edit visual content via text prompts—designed for commercial use without copyright complications.

However, market watchers remain cautious. “While Adobe’s updated guidance and strong demand signals are encouraging, investors appear to be waiting for more concrete proof of AI-driven revenue impact, especially amid rising GenAI competition,” RBC Capital Markets stated.

Forecast up, market still cautious

The company now projects fiscal 2025 revenue in the range of $23.50 billion to $23.60 billion, an upward revision from the previous estimate of $23.30 billion to $23.55 billion. Nevertheless, at least five brokerages have trimmed their price targets following Adobe’s second-quarter results.

Year to date, Adobe’s stock has declined roughly 13%, with its forward P/E ratio standing at 18.88, trailing behind Autodesk's 29.16.

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