Overview
- Adobe fell about 5.4% to close near $310 with an intraday low of $311.55 after Oppenheimer cut the rating to Perform from Outperform and withdrew its price target.
- The downgrade extends a wave of bearish calls, including Goldman Sachs moving to Sell with a $290 target, BMO to Market Perform, Jefferies to Hold, and KeyBanc to Underweight with a $310 target.
- Selling spread across application software, with Salesforce down 6.9%, ServiceNow off 3.6%, Oracle down 1.6%, and Microsoft slipping 0.9%, while Barclays also downgraded Snowflake to Hold.
- Reports cite growing competition from generative AI tools by OpenAI and Meta as well as Canva and Figma, with BMO’s survey showing more than half of students and roughly half of freelancers using Canva versus about 10% using Adobe.
- Analysts warn AI could pressure seat-based SaaS pricing and margins if Adobe must boost AI investment, and investors are watching upcoming results such as Salesforce’s Feb. 25 report for signs of durable AI-driven demand.