Adobe's 23% year-to-date drop looks overdone, with record $6.62B Q2 revenue and AI-first ARR tripling supporting a $306 BUY target. Adobe's forward P/E of 10 is less than half Microsoft's 28 multiple, and it generates triple Autodesk's revenue at a lower valuation. CEO Narayen's transition to chair after 18 years and an interim CFO create execution risk, anchoring the bear case at $262.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Adobe didn't make the cut. Grab the names FREE today. Adobe (NASDAQ:ADBE) has been one of the most punished large-cap software names of 2026.
The question every shareholder asks is whether the selloff has overshot fundamentals. Based on the 24/7 Wall St. price target model, the risk-reward has tilted constructive. The stock closed at $270.49 on August 13, and our proprietary model points to modest but real upside from here.
Adobe entered 2026 near $350 and bottomed at roughly $206.36 in June, driven by CEO succession headlines, CFO Dan Durn's June 15, 2026 departure, and fear that generative AI erodes creative-software moats. The stock is down 22.71% year to date and 22.95% over the past year, but shares are up 22.52% in the last month. Fundamentals are driving the rebound.
Q2 FY2026, reported June 11, 2026, delivered record revenue of $6.62 billion, up 13%, with non-GAAP EPS of $5.96. AI-first ARR tripled year over year to exceed $500 million, and management raised full-year FY26 guidance to $26.50 to $26.60 billion in revenue and $24.35 to $24.45 in non-GAAP EPS. That marks a five-quarter EPS beat streak.
Bulls see three reinforcing catalysts. First, AI-first ARR is on a genuine ramp, tripling year over year to $500 million+, with Firefly ARR growing 50% quarter over quarter and creative freemium MAU jumping to greater than 90 million. Second, the Semrush acquisition adds $480 million in ARR and plugs Adobe directly into brand-visibility workflows.
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