June 13, 2025 | New York — Adobe Inc. (NASDAQ: ADBE) shares fell sharply on Thursday, closing at $393.63—down 4.85% for the day—as investors reacted to mixed sentiment around the company’s near-term outlook despite strong second-quarter earnings and reaffirmed confidence from Wall Street analysts.
The stock traded between $383.75 and $399.85 during the session and remains well off its 52-week high of $587.75. Adobe now holds a market capitalization of $167.6 billion, with a price-to-earnings ratio of 25.9.
Solid Financials and Raised Guidance
Adobe delivered second-quarter revenue of $5.87 billion, surpassing analyst expectations of $5.80 billion. Net income for the quarter rose dramatically to $1.81 billion, representing a net margin of 31.69%. Earnings per share came in at $5.08, and the company reported an EBITDA of $2.38 billion.
The company also raised its full-year revenue guidance to $23.55 billion at the midpoint, reflecting continued strength in its core business lines, particularly Creative Cloud and Document Cloud services. Adobe’s Digital Media Annual Recurring Revenue (ARR) rose 12% year-over-year on a constant currency basis.
Analysts Maintain Positive Ratings
RBC Capital Markets reaffirmed its Outperform rating and maintained a $480 price target, citing Adobe’s strong profit margins and solid execution on its long-term roadmap. The firm noted Adobe’s growing role in content supply chain automation and its potential in leveraging generative AI technologies.
Other firms, including Stifel, Mizuho, and BMO Capital, echoed similar optimism. While Stifel and Mizuho slightly lowered their price targets to $480 and $530 respectively—citing macroeconomic uncertainties and “group multiples compression”—both maintained a bullish stance on Adobe’s business fundamentals. BMO Capital highlighted the company’s improving Creative Cloud performance and consistent revenue growth as key positives.
KeyBanc, however, maintained a Neutral rating, pointing to cautious optimism around pricing changes and the monetization of Adobe’s AI-driven tools.
Competitive Landscape and Investor Sentiment
While Adobe’s financial metrics and analyst outlook remain strong, concerns persist about rising competition in the generative AI space. Some investors appear to be adopting a wait-and-see approach as Adobe continues to implement its pricing and product strategies aimed at integrating AI more deeply across its platform.
Despite Thursday’s drop, Adobe stock remains a key holding for many institutional investors. Its gross profit margin stands at an impressive 89.25%, and the company continues to post solid operating efficiency, with operating expenses totaling $2.93 billion for the quarter.
Adobe remains a fundamentally strong company with solid financials, high institutional confidence, and a clear strategy centered on innovation and AI. While near-term stock volatility reflects market concerns about tech sector valuations and competition, analysts broadly agree Adobe is well-positioned for long-term growth.