Investment bank Jefferies downgraded Adobe's rating to "Hold," setting a price target of $400. Analysts cautioned that while Adobe's Creative Cloud maintains an irreplaceable position among professional designers, its market share in the lower-end segment is being steadily "eroded" by a multitude of flexible and inexpensive AI alternatives. Adobe's predicament lies in the fact that despite its strong financial performance for the full-year 2025, even exceeding expectations for Annual Recurring Revenue (ARR), capital market expectations for its future growth are shrinking. Jefferies pointed out that Adobe requires a "step-function" style explosion in AI technology to convince investors it can return to a double-digit growth trajectory. Currently, Adobe's stock has fallen nearly 5% since the start of 2026, reflecting market unease about its defensive capabilities against the combined pressure from competitors like Canva, OpenAI, and various emerging AI creative platforms. Facing collective skepticism from institutions, Adobe is not standing idly by. At the end of 2025, the company announced integration with OpenAI's applications and launched a new multimodal model for Firefly. However, analysts view these moves more as "playing catch-up" rather than "leading the pack." In 2026, seen as the inaugural year for widespread AI application deployment, Adobe must prove it is not merely an old tailor stitching AI into old garments, but a pioneer capable of defining the next generation of creative workflows; otherwise, its stock price may linger around levels seen five years ago for an extended period.
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