Adobe Inc. has emerged as a noteworthy player in the market for AI stocks, commanding attention as analysts adjust their projections. On December 5, Barclays announced it has lowered its price target for Adobe shares from $465 to $415, while still maintaining an “Overweight” rating. This revision occurred just days before the company is set to announce its fourth-quarter fiscal 2025 results on December 10.
Barclays has expressed confidence in Adobe’s stock performance, citing positive momentum in Annual Recurring Revenue (ARR) and the potential benefits from the Semrush acquisition. However, the firm has adopted a cautious stance in the near term, awaiting clearer guidance from the company. Analysts expect Adobe to report around $571 million in its final quarter of new Net Dollar-based Monthly ARR, with an optimistic scenario suggesting a range of $600–610 million based on favorable web traffic trends.
Projections indicate that Adobe’s total ARR could reach approximately $25.8 billion by the end of fiscal 2025, reflecting a year-over-year growth rate of about 11.5%. This figure surpasses the company’s initial guidance of roughly 11% projected at the year’s outset.
As for the Semrush acquisition, which is anticipated to close in the first half of fiscal 2026, it is expected that the new revenues will not be reflected in Adobe’s fiscal year 2026 guidance. However, analysts are optimistic that the deal could contribute an additional one to two points of revenue growth and yield neutral to positive implications for earnings per share, assuming the deal finalizes around April 1.
In the context of mobile applications, the firm noted an increase in quarter-over-quarter downloads for the Express mobile app but does not foresee an update from Adobe on its artificial intelligence ARR metric, especially following a strong performance in the previous quarter.
Despite recognizing Adobe’s potential as an investment opportunity, some analysts suggest that certain other AI stocks on the market present even greater upside potential with lower associated risks. Investors interested in undervalued AI stocks that could benefit from recent economic trends may find complementary opportunities elsewhere.
The discussions around Adobe’s results and ongoing developments reflect a dynamic environment for stakeholders, particularly in the rapidly evolving AI sector. The upcoming financial disclosures will be pivotal for assessing the company’s trajectory moving forward.
