Redburn Rothschild Downgrades Adobe Inc. (ADBE) to ‘Neutral’ Rating; Lowers Price Target

Billionaire Kerr Neilson has bought over $1 million worth of shares in Adobe Inc. (NASDAQ:ADBE), representing 0.06% of his stock portfolio, securing the company a spot in Billionaire Kerr Neilson’s 10 Stock Picks with Huge Upside Potential.

Redburn Rothschild Downgrades Adobe Inc. (ADBE) to ‘Neutral’ Rating; Lowers Price Target from $420 to $280

For Q2 FY25, Adobe Inc. (NASDAQ:ADBE) reported revenue of $5.87 billion, a YoY increase of 11%. Meanwhile, its GAAP EPS grew by 13% to $3.94 per share. Furthermore, the company’s Digital Media segment achieved an ARR of 12.1% ($18.09 billion), contributing to record Q2 operating cash flow of $2.19 billion.

Despite strong Q2 results, Redburn Rothschild reduced its price target for Adobe Inc. (NASDAQ:ADBE) from $420 to $280, downgrading it to a ‘Neutral’ rating. This downgrade, which occurred on July 2, 2025, is attributed to the much-anticipated IPO of Figma, which filed an update regarding its IPO offering on July 1, 2025. According to the official announcement, the rival firm has filed a registration on Form S-1 with the U.S. SEC for the proposed IPO of its Class A common stock. This potential IPO of Figma raises concerns around Adobe’s competitive position in the market, particularly after its failed $20 billion acquisition of Figma in 2023.

Nevertheless, Adobe Inc. (NASDAQ:ADBE) is progressing well and is already ahead of its $250 million AI revenue goal for FY25, thanks to its Firefly and Acrobat AI Assistant tools. Moreover, its full-year guidance remains the same, indicating FY25 EPS of $20.50-$20.70.

Adobe Inc. (NASDAQ:ADBE) offers Digital Media and Digital Experience platforms, delivering creative, document, and experience-based solutions to creators, marketers, and enterprises globally.

While we acknowledge the potential of ADBE to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than ADBE and that has 100x upside potential, check out our report about this cheapest AI stock.

READ NEXT:  7 Best Stocks to Invest in for a Quick Return and 10 Best Cheap Stocks to Buy According to Billionaire Ray Dalio.