Adobe’s (ADBE) Turnaround Story Gains Shape, but Stifel Still Sees Uncertainty

Adobe Inc. (NASDAQ:ADBE) is one of the Trending AI Stocks on Wall Street.  On December 9, Stifel reduced its price target on the stock to $450.00 from $480.00 while maintaining a “Buy” rating. The price target cut comes ahead of the company’s fiscal fourth-quarter 2025 results, scheduled for release on December 10.

The firm noted that even though Adobe has been strengthening its presence in generative AI over the past year, particuarly through its MAX event in October, a key overhang is the likelihood that AI will disrupt creative departments.

This will lead to creators becoming more efficient and shrink the number of addressable seats over time. By positioning itself as the “Switzerland” in the market and a central generative AI hub, the firm sees a clearer path for Adobe to benefit from widespread AI adoption in creation.

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That said, the catalysts to turn sentiment around remain “foggy,” but it believes that we are in the early days of a “critical and successful AI-induced strategy pivot at Adobe.”

Meanwhile, TD Cowen analyst J. Derrick Wood reiterated a Hold rating on the stock on December 8 with a $420.00 price target. While Adobe’s valuation looks attractive, AI competition and slowing growth into 2026 has tempered the firm’s optimism.

Mixed signals have led the firm to maintain a hold rating until there is more clarity on AI’s impact on Adobe’s business model.

“See constructive setup on stable checks and low valuation; ADBE reports 4Q on 12/10. Partner survey fairly consistent w/ last qtr & includes outlook for modest growth deceleration in ’26, in-line w/ Street. AI product demand ramping but landscape increasingly competitive. 3rd party credit card data showed +4% Y/Y growth vs. +5% last qtr. Expecting marginal beat & in-line guide & at ~14x EV/CY26E FCF we think shares are poised for a bounce. Maintain Hold.”

Adobe Inc. (NASDAQ:ADBE) is a software company that provides digital marketing and media solutions.

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