Adobe Inc. (NASDAQ:ADBE) delivered another quarter showing that artificial intelligence can strengthen incumbent software companies. Investors still want more proof.
Reuters reported September 10 that Adobe’s third-quarter revenue rose to $6.76 billion, beating the $6.70 billion consensus estimate. Adjusted earnings of $6.13 per share also topped expectations. Adobe also raised its full-year revenue and earnings targets. Annual recurring revenue from Adobe’s AI-first products more than doubled year over year. Yet the shares fell after hours after fourth-quarter revenue guidance came in slightly below expectations at the midpoint.
That reaction captures the current software market perfectly. Investors no longer reward companies simply for attaching AI to existing products. They want evidence that AI accelerates bookings, retention or pricing.
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Salesforce, Inc. (NYSE:CRM) has begun producing some of that evidence. Reuters Breakingviews recently noted that Agentforce had exceeded roughly $1.5 billion in annualized recurring revenue while Salesforce reported its strongest net-new annual order value growth in four years.
Adobe Faces AI on Both Sides of the Ledger
Adobe Inc. has a bull case built around distribution. Creative Cloud already sits inside professional workflows, and products such as Firefly can monetize AI directly while helping defend Adobe’s ecosystem against standalone generators.
The bear case is that generative AI attacks some of the very activities Adobe historically monetized. Canva, Figma and AI-native creation tools can lower switching barriers and pressure pricing.
Salesforce Has a Different Monetization Test
Salesforce, Inc. faces a related but different test. Agentforce could turn Salesforce’s enormous customer data footprint into a distribution advantage for enterprise agents. The risk is that autonomous agents eventually reduce the importance of conventional seat-based software and weaken some legacy SaaS economics.
Hedge-fund sentiment cooled for both stocks in Q2. Adobe ownership slipped to 81 funds from 86, while Salesforce fell to 99 from 101. Short interest, however, has been moving lower. Adobe’s August 14 short interest was about 5.1% of float using Benzinga’s float measure, while Salesforce’s was about 3.7%.
Valuation has compressed considerably from the software sector’s former extremes, but neither company gets a free pass anymore. Adobe must prove AI-first growth can offset disruption to creative workflows. Salesforce must prove Agentforce can accelerate overall growth rather than merely become another product category. Agentforce monetization is becoming easier to measure, while Adobe still faces a more direct generative-AI threat to its core use cases. Both are holds rather than aggressive buys until AI growth clearly lifts company-wide growth rates.
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