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Valued at a market cap of $116 billion, Adobe stock has underperformed the broader markets after touching all-time highs in late 2021. Today, Adobe (ADBE) stock is down 63% from those record levels.
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Adobe is in the middle of a leadership change and a major bet on artificial intelligence. That combination has made the stock a tricky one for analysts to price heading into next year.
The company just posted a quarter that beat expectations on nearly every measure investors normally watch.
Yet one Wall Street bank still found a reason to lower its price target.
Adobe stock leans on its AI growth story
Adobe’s pitch to investors right now centers on user growth first and revenue second. The company is chasing what it calls a freemium strategy, meant to pull huge numbers of new users into its products before ever charging them.
The strategy showed up clearly in Adobe’s third quarter fiscal 2026 earnings call on September 10.
Chair and CEO said the company’s tools now reach over one billion monthly active users across its businesses, up more than 20% from a year earlier.
Related: Adobe ends an 18-year era as AI pressure mounts
Creative freemium , which include Firefly and Express, crossed 100 million and grew more than 70% compared with the same period last year.
Adobe also disclosed that Narayen will move into an executive chair role on December 1, and Anil Chakravarthy, currently president of customer experience orchestration, will become the company’s next CEO.
has led Adobe for 29 years and has overseen its growth from under $1 billion in annual revenue to more than $26 billion today.
JPMorgan trims Adobe stock price target
JPMorgan lowered its price target on Adobe stock to $315 from $340 while keeping an Overweight rating on the shares, according to The Fly.
The analyst told investors that Adobe’s fiscal third quarter results were “robust and beat expectations modestly.”
- of $6.76 billion, up 12% compared with a year earlier
- of $6.13, up 15% year over year
- Total ending of $27.5 billion, up 11.2%
- ending annual recurring revenue up 40% from the prior quarter
- topping 100 million, up more than 70% year over year
Despite that beat, JPMorgan said Adobe’s fourth quarter revenue outlook came in modestly below consensus.
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The firm tied that softer guidance to Adobe’s ongoing focus on user acquisition rather than pricing.
Adobe’s current period remaining performance obligations, a measure of contracted future revenue, grew just 9% year over year, its slowest pace since early fiscal 2023.
JPMorgan also pointed to a slowdown in revenue growth expected in fiscal 2027. Even so, the firm argued the shares are now inexpensive and offer what it called a “low bar for upsides to the share price from a recovery in monetization.”
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Adobe management defends growth strategy
Adobe’s leadership has been direct about trading some near-term revenue for long-term reach.
Narayen addressed the tradeoff on the earnings call when asked about pausing planned price increases on Creative Cloud, stating:
“I’m actually really happy that we didn’t focus on the pricing actions, because that, while it may have provided some short term relief, would not be as critical as continuing to drive new user adoption.”
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Interim CFO Steve Day added that the softer bookings growth reflects that same strategy rather than any change in demand, noting that both remaining performance obligation measures typically step up in Adobe’s fourth quarter and stay flat for the following three quarters.
He said this year is following the same pattern seen in prior years.
For now, Wall Street appears willing to give Adobe room to run its playbook.
JPMorgan’s reduced price target still points to meaningful upside from current levels, and the firm’s “Overweight” rating suggests it believes the current dip in bookings growth is a phase, not a trend.
Whether that patience pays off will likely depend on how quickly Adobe can convert its swelling user base into paying subscribers.
Related: Adobe’s rating cut to underweight as CEO search drags on
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This story was originally published September 13, 2026 at 9:13 AM.