Change

Artificial Intelligence

Billy

<h3 id="key-takeaways">Key Takeaways</h3>
<ul>
 <li>Adobe is scheduled to release Q3 fiscal results Thursday following market close, with Wall Street projecting $6.08 earnings per share and $6.69 billion in revenue</li>
 <li>Shares have declined 27% year-to-date and have dropped following 15 of the last 20 quarterly reports</li>
 <li>Persistent worries about artificial intelligence competition continue pressuring the stock despite robust financial performance</li>
 <li>The company recently named Anil Chakravarthy as its next CEO, set to replace Shantanu Narayen in December; shares tumbled 6.7% following the announcement</li>
 <li>The company’s AI-driven annual recurring revenue has grown threefold year over year, surpassing $500 million according to last quarter’s earnings call</li>
</ul>
Adobe approaches Thursday’s <a href="https://www.barrons.com/articles/adobe-earnings-stock-price-d384388b?mod=RTA" rel="noopener noreferrer nofollow">earnings</a> announcement under significant pressure. Shares have tumbled 27% during 2026, and the market has consistently failed to reward strong results from the software giant.
<a href="https://knockoutstocks.com/stock/ADBE" rel="noopener noreferrer nofollow"> <img src="https://knockoutstocks.com/api/stocks/ADBE/embed" alt="ADBE Stock Card"> Adobe Inc., ADBE </a>
Wall Street consensus, compiled by FactSet, calls for adjusted earnings of $6.08 per share alongside revenue totaling $6.69 billion for the company’s fiscal third quarter. This represents growth from the year-ago period when Adobe delivered $5.31 per share on $5.99 billion in sales.
The projected revenue figure indicates 11.8% year-over-year expansion, an acceleration from the 10.7% growth rate recorded in the comparable quarter of the previous year.
Last quarter, Adobe surpassed revenue forecasts by reporting $6.62 billion, marking 12.7% annual growth. The company also delivered better-than-expected billings figures and issued upbeat EPS guidance for the following period.
Yet that performance record hasn’t translated to stock gains. Dow Jones Market Data shows Adobe shares have declined after 15 of its most recent 20 earnings announcements. Simply exceeding estimates hasn’t been sufficient to lift the stock.
<h3 id="artificial-intelligence-competition-weighs-on-sentiment">Artificial Intelligence Competition Weighs on Sentiment</h3>
Investor anxiety centers on whether <a href="https://knockoutstocks.com/stock/ADBE" rel="noopener noreferrer nofollow">Adobe</a> can maintain its competitive position as artificial intelligence capabilities advance and new rivals emerge in the creative software market.
The company has responded by integrating AI features across its product portfolio. During June’s earnings conference call, management disclosed that AI-focused annual recurring revenue had tripled compared to the prior year and exceeded $500 million.
TD Cowen’s Derrick Wood, who maintains a Hold rating and $245 price target on the shares, noted this week that Adobe’s artificial intelligence initiatives “generally prioritize adoption over monetization in the medium term.” This approach may constrain immediate revenue growth while positioning the company for stronger performance down the road.
Wall Street analysts have largely maintained their forecasts over the past month, indicating limited expectation for major surprises when results are unveiled.
As the first company in its sector to report earnings this cycle, Adobe won’t have peer comparison data available. Vertical software stocks have averaged a 1.5% decline over the past 30 days, while Adobe has underperformed with approximately 6.1% losses during that timeframe.
<h3 id="leadership-change-introduces-additional-uncertainty">Leadership Change Introduces Additional Uncertainty</h3>
Adobe disclosed last week that Anil Chakravarthy will assume the CEO role in December. Chakravarthy currently oversees the company’s Customer Experience Orchestration division and global field operations.
He will take over from Shantanu Narayen, who has led Adobe for 18 years. The company initially announced Narayen’s planned departure in March.
Shares fell 6.7% on September 4 when the CEO selection was revealed. Piper Sandler’s Billy Fitzsimmons observed that the extended search timeline had led investors to anticipate an external candidate would be chosen.
Market participants will pay close attention to whether Chakravarthy participates in Thursday’s earnings call and provides any preliminary indication of his strategic priorities.
The company will release results after Thursday’s closing bell.
The post <a href="https://blockonomi.com/adobe-adbe-stock-earnings-preview-as-investors-brace-for-thursdays-report/" rel="noopener noreferrer nofollow">Adobe (ADBE) Stock: Earnings Preview as Investors Brace for Thursday’s Report</a> appeared first on <a href="https://blockonomi.com" rel="noopener noreferrer nofollow">Blockonomi</a>.

Adobe (ADBE) Stock: Earnings Preview as Investors Brace for Thursday’s Report

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