Adobe Stock News

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American stocks have plunged in the past few days. The S&P 500 index has crashed by over 8.6% from its highest level this year, and is at its lowest point since September 16.

Adobe (ADBE) is expected to report fiscal 2025 first-quarter results after the closing bell Wednesday, with analysts mostly bullish leading into the report and next week's Adobe Summit.

I believe Adobe shares are a strong sell due to concerns over AI monetization, competition, and a stretched valuation mismatch. The company's free AI adoption strategy delays revenue capture, while competitors charge for AI add-ons, challenging Adobe's pricing model. Earnings preview shows mixed signals with tight EPS and revenue estimates, highlighting potential market volatility.

The week will bring earnings reports from Ulta Beauty, Dick's Sporting Goods, and DocuSign, and we'll see inflation data for February.

The latest reports on inflation, jobs, and consumer sentiment could be in the spotlight this week, with Wednesday's release of the Consumer Price Index (CPI) offering a key update on price pressures in February.

Technology has been one of the worst-performing sectors in 2025, led by a sell-off in megacap behemoths like Apple, Microsoft, and Nvidia. But Adobe (ADBE 1.04%) has held up well and is up slightly year to date at the time of this writing.

Adobe's reliable subscription-based model and strong fundamentals, including impressive revenue and net income growth, make it a solid investment. Adobe's comprehensive software suite and seamless cloud integration provide a significant competitive moat, despite increasing competition and AI advancements. Valuation is reasonable, with forward P/E ratios and price/free cash flow multiples aligni...