Stronger Earnings And AI Integration Might Change The Case For Investing In Adobe (ADBE)

• Adobe recently reported its fiscal 2025 results, with revenue rising to US$23.77 billion and net income to US$7.13 billion, alongside issuing upbeat fiscal 2026 guidance and completing a large share repurchase program.
• The company also launched Photoshop, Express and Acrobat as integrated ChatGPT apps and highlighted accelerating AI adoption across Firefly and its broader creative and productivity suite, underscoring how generative AI is becoming central to Adobe’s product usage and monetization.
• We’ll now examine how this combination of stronger earnings, AI‑driven product integration, and upgraded 2026 guidance may reshape Adobe’s investment narrative.

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Adobe Investment Narrative Recap

To own Adobe, you need to believe its AI infused creative and document tools can keep attracting and monetizing users faster than competitors can catch up. Right now, the key short term catalyst is whether generative AI features and ecosystem integrations convert into durable subscription and AI related ARR growth, while the biggest risk is intensifying AI competition that could pressure pricing and net new ARR. The latest earnings beat and 2026 guidance support the catalyst but do not remove that risk.

The launch of Photoshop, Express and Acrobat as ChatGPT apps looks especially relevant here, because it puts Adobe’s tools directly in front of ChatGPT’s 800 million users and ties the company’s AI features to a frequently used platform. This move could amplify adoption of Firefly and Creative Cloud, reinforcing the AI monetization story that underpins both the recent guidance and investors’ focus on subscription and AI driven revenue streams.

Yet even with Adobe’s upbeat 2026 guidance, investors should be aware that rising AI competition and flat net new ARR expectations could still weigh on...

Read the full narrative on Adobe (it's free!)

Adobe’s narrative projects $29.3 billion revenue and $8.7 billion earnings by 2028. This requires 9.0% yearly revenue growth and about a $1.8 billion earnings increase from $6.9 billion today.

Uncover how Adobe's forecasts yield a $447.56 fair value, a 29% upside to its current price.

Exploring Other Perspectives

Some of the most optimistic analysts were already assuming Adobe could reach about US$31.2 billion in revenue and US$11.4 billion in earnings by 2028, so this latest AI heavy update may either validate that aggressive view or prompt a rethink, depending on how you weigh the competitive risk that Adobe’s AI investments still need to translate into clearly superior, commercially safe products.

Explore 88 other fair value estimates on Adobe - why the stock might be worth just $375.00!

Build Your Own Adobe Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Adobe research is our analysis highlighting 4 key rewards that could impact your investment decision.
• Our free Adobe research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Adobe's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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