Phillip Securities Downgrades Adobe (ADBE) to Neutral, Here’s What You Should Know

Adobe Inc. (NASDAQ:ADBE) is one of the Best Software Stocks to Buy in 2026. Adobe Inc. (NASDAQ:ADBE) has declined around 14% over the past month. The major reason behind the decline has been the rising competition concerns from AI. Analysts have differing views on the company’s future outlook. Overall, the Street’s average 12-month price target suggests more than 11.5% upside from current levels.

​On June 29, Phillip Securities downgraded Adobe to Neutral, slashing its price target to $203 from $385. The firm noted that the key concern behind the cautious rating is slowing core software growth. Phillip Securities highlighted that despite the company’s early AI investments, the revenue stream is expected to stay immaterial for years. The firm added that peers are already monetizing AI more meaningfully, and it sees little room for a near-term valuation rebound in application software.

​On the other hand, just a few days later, on July 2, HSBC took a more bullish view and upgraded the stock from Hold to Buy, lifting the price target from $282 to $308. The firm argued that fears about generative AI disrupting Adobe’s business have gone too far. It pointed to strong fiscal Q2 results, reflecting 12.7% revenue growth and a 13.1% rise in remaining performance obligations, as evidence that customers are sticking with Adobe’s ecosystem rather than using AI-native rivals.

​Moreover, HSBC also raised earnings estimates for 2026-2028 by 3% – 8%, citing operating momentum and buybacks, and noted the company’s AI push as complementary to its core software segment.

Adobe Inc. (NASDAQ:ADBE) is a provider of multimedia and digital marketing software such as Photoshop, Illustrator, and InDesign, among others. It also offers AI products such as Adobe Firefly and Adobe Sensei. The company was founded in 1982 and is headquartered in San Jose, California.

While we acknowledge the risk and potential of ADBE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ADBE and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT:  10 Good Stocks to Invest in Now and 10 Most Undervalued US Stocks According to Hedge Funds. 

Disclosure: None. Follow Insider Monkey on Google News.

1281292 - 11759070 - 1