Adobe Shares Slide 13% Following Disappointing AI Monetization and Tepid Outlook

Despite record revenue and better-than-expected earnings, investors express concerns over Adobe's AI strategy and slower-than-hoped monetization progress.

Adobe reported record quarterly revenue of $5.71 billion, surpassing analyst expectations, with adjusted earnings of $5.08 per share.
The company's guidance for Q2 revenue and earnings fell slightly below Wall Street projections, contributing to a 13% drop in its stock price.
Annual recurring revenue (ARR) from AI reached $125 million, a small fraction of total revenue, with Adobe expecting this to double by year-end.
Analysts remain optimistic about Adobe's long-term prospects in AI, but concerns linger over the pace of monetization and competition from AI-native rivals.
Adobe plans to provide further AI updates and financial details at its upcoming Adobe Summit event next week.