"Since the start of 2026, Adobe (NASDAQ:ADBE) has plunged 26% as Wall Street questions whether its creative software empire can withstand the generative AI revolution, plunging over 44% from its 52-week high as the market reprices the stock for a world where AI tools commoditize creative work that once required Adobe's premium software suite. The selloff coincides with Reddit discussion scores sliding from very bullish (85-88) in late January to mixed bearish-neutral (32-68) by mid-February."
"Adobe's valuation has collapsed to a P/E of 16x (less than half its historical range) despite maintaining industry-leading operating profit margins above 36%, suggesting the market is pricing in existential risk rather than rewarding current performance. Goldman Sachs slapped a Sell rating with a $290 price target, HSBC cut its target to $302 from $388, and Piper Sandler downgraded to Neutral at $330."
Adobe's stock dropped sharply in early 2026, falling 26% year-to-date and over 44% from its 52-week high as investors reprice expectations in light of generative AI. The company continues to report industry-leading operating profit margins above 36%, yet the price-to-earnings multiple compressed to about 16x. Major analysts revised ratings and targets, including a Goldman Sachs Sell at $290, HSBC cutting its target to $302, and Piper Sandler downgrading to Neutral at $330. Retail sentiment on Reddit shifted from bullish to mixed or bearish, with users raising concerns about product quality and Adobe's ability to monetize AI fast enough to offset disruption.
Read at 24/7 Wall St.
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