Adobe $ADBE is one of the most iconic names in creative software.
It is the $167B powerhouse behind industry staples like Photoshop, Illustrator, and Premiere Pro.
But Wall Street isn’t cutting it any slack.
Despite delivering double beats in 8 straight quarters, this stock has been punished for 7 of its last 8 earnings reports.
Investors aren’t reacting to the numbers. They’re reacting to the narrative.
And that narrative has shifted.
The rise of AI-native challengers like Midjourney, Runway, and Stability AI has questioned Adobe’s dominance.
Despite steady revenue growth and ambitious product updates, the market seems unconvinced that Adobe can defend its turf in this new competitive landscape.
In an environment where every software name is expected to show AI hypergrowth, “steady” isn’t cutting it.
The price action reflects that tension.
So what else did we learn from this earnings report? Let’s dive into the details.
Here are the latest earnings stats for ADBE 👇
*Click the image to enlarge it
Adobe had a -1.71 reaction score after reporting a double beat.
The company reported revenues of $5.87B, versus the expected $5.8B, and earnings per share of $5.06, versus the expected $4.97.
Now let's dive into the data and talk about what happened with this report 👇
ADBE has been punished for 7 of its last 8 earnings reports 🩸
Adobe fell 5.3% after this earnings report, and here's why:
The rise of AI-driven competitors like Stability AI and Midjourney has intensified competition in the creative software market, raising concerns about Adobe's ability to maintain its dominant market position.
Management reaffirmed their 11.0% Digital Media ending ARR growth target. This represents a continued deceleration from historical growth rates.
They also raised the 2025 revenue guidance to $23.50-$23.60B, but it wasn't enough. Given the AI opportunity, the market was looking for even more aggressive guidance.
This report wasn’t enough to impress investors.
Adobe has been punished for 7 of its last 8 earnings reports despite beating top and bottom-line expectations each time. This is a clear sign that expectations are sky high.
Despite sitting at a long-term level of support, the stock continues struggling with upside follow-through.
We expect ADBE to churn sideways for the foreseeable future.
Thank you for reading.
- The Beat Report Team
P.S.: Aerospace & Defense stocks are soaring — and it’s not just a local story.
From Rolls-Royce $RYCEY in the UK, to Raytheon $RTX in the U.S., to Elbit Systems ($ESLT) in Israel… this is a powerful global trend.
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