Adobe (ADBE.US) experienced the strongest bearish wave in history: concerns about AI disruption intensified, and the number of sales ratings reached a record

The Zhitong Finance App learned that as the market became more concerned that Adobe (ADBE.US) would be unable to maintain competitiveness in the AI era, analysts' views on this creative software giant had fallen to a historical freezing point. This week, two agencies downgraded Adobe ratings to join a growing number of skeptics. They worry that AI companies' products will erode demand for software such as Photoshop and reduce Adobe's long-term growth potential.

Analysts turn collectively: Number of sales ratings hits a record high

The first rating downgrade this week came from Wells Fargo Securities. The agency downgraded Adobe's rating two levels in a row on Monday, from “more holdings” to “less holdings,” and lowered its 12-month target price from $270 to $225. This brought Adobe's sales ratings to 7, the highest in history, compared to zero in mid-2025.

Wells Fargo analyst Michael Thurin wrote, “More obvious cracks in Adobe's growth trajectory are beginning to show.” Referring to Adobe's third-quarter results released last month, he said they were “pretty lackluster.” He also said that given recent management comments about delaying price increases for core creative products, Adobe's ability to meet its goals for the whole year seemed “difficult.”

On Tuesday, HSBC analyst Stephen Bussey downgraded Adobe's rating from “buy” to “hold” and the target price from $310 to $267, calling Adobe a “realistic candidate for AI-led disruption.”

Since this year, analysts have downgraded Adobe stock ratings at least 15 times, including two this week. Affected by this, Adobe's recommended consensus indicator — a proxy indicator that combines buying, holding, and selling ratings — dropped to 3.16 points on a 5-point scale, the lowest in history. In contrast, the average consensus rating for S&P 500 Software Index constituents is 4.65, and the bullish sentiment is clearly stronger.

The stock price plummeted for the third year in a row and is seen as a typical example of AI disruption

Concerns about AI disruption are a core topic of concern for software investors this year. At the beginning of 2026, the software sector plummeted as AI native companies such as OpenAI and Anthropic continued to launch new products. Sector sentiment has largely recovered as investors think some software is difficult to replace, but Adobe is still the obvious exception.

Since this year, Adobe's stock price has fallen by nearly 30%, while the iShares Extended Technology Software ETF rose 3.7% over the same period. The ETF is widely regarded as a proxy indicator for the software sector. Adobe's stock price is likely to fall by more than 20% for the third year in a row. This long-term sell-off reflects what the market sees as a typical example of AI disruption.

Investors are concerned that users may abandon their Photoshop subscriptions and instead use tools from companies such as OpenAI or Anthropic to generate images through prompts. Although Adobe also provides its own AI capabilities, the market fears that AI competition will suppress its pricing power and drag down profit margins.

This concern is at the heart of HSBC's downgrade. Busey believes the competition comes from “Adobe cloning software written based on AI tips.” Citing media reports, he wrote that a company called ArtCraft provides free products of the same type, including “Photoshop, Illustrator, Premiere, Lightroom, Acrobat, After Effects, and InDesign versions.”

Busey wrote that this type of competition “poses a negative news risk to Adobe,” although he believes such services are also risky for users.

Overall, Adobe is facing multiple pressures from analysts' sentiment, stock price performance, and AI competition concerns. The market is concerned about whether this creative software giant can maintain the moat of its core products in the AI era.