After the AI (artificial intelligence) miss from Salesforce (CRM:NYSE) last week, the foreboding mood around Adobe (ADBE:NASDAQ) is almost tangible. Like many enterprise software firms, it has been happy to talk up the potential growth power-up of integrating AI across its suite, but if the proof of the pudding is in the eating, and so far investors have been left hungry.

In March, Adobe shares tumbled nearly 14% after the creative design software maker issued strong fiscal first-quarter results but came up short on quarterly revenue guidance. More of the same in fiscal Q2 (13 June) could do serious damage to a stock already licking its wounds following a 23% year-to-date slump.

Technology followers have learned, often painfully, that new developments take longer and are usually more costly than initial projections, so while analysts seem largely confident Adobe is not destined for the AI scrap heap, progress may come in increments rather than a rapid surge. 

Analysts at Mizuho recently suggested Adobe might be ‘one of the most out-of-favour and under-owned large-cap software stocks out there’, with ‘horrible’ sentiment, a view largely shared by Shares, hence our 2024 plug on the stock, but the pressure is mounting on Adobe to deliver on the promise. 

US UPDATES OVER THE NEXT 7 DAYS

QUARTERLY RESULTS

12 June: Broadcom

13 June: Adobe, Kroger, Jabil Circuit

‹ Previous2024-06-06Next ›