Adobe Stock Drops 12% Following Lower Revenue Forecast Despite Record Earnings
The software giant's cautious revenue guidance for 2025 and concerns over AI monetization have shaken investor confidence, erasing nearly $30 billion in market value.
- Adobe reported record fourth-quarter revenue of $5.61 billion and adjusted earnings of $4.81 per share, surpassing Wall Street expectations.
- The company issued a revenue forecast of $23.3-$23.5 billion for fiscal year 2025, falling short of analysts' projections of $23.8 billion.
- Shares fell sharply, erasing $29.8 billion in market capitalization, marking Adobe's largest single-day drop in nine months.
- Investors remain skeptical about Adobe's ability to translate its AI investments, including its Firefly generative AI tools, into significant revenue growth amidst rising competition from AI startups.
- Analysts suggest Adobe's conservative guidance reflects uncertainties around AI adoption rates and a cautious approach to pricing new AI-driven features.
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