Adobe (ADBE) Stock Is Down 43% – Here’s Why Some Analysts Still See 60% Upside

TLDR

• Adobe (ADBE) is trading near its 52-week low of ~$259, down 43% from its high of $453
• A sector-wide software selloff, AI disruption fears, and Figma’s aggressive growth forecast drove the decline
• Figma jumped 14% after forecasting $1.36–$1.37B in 2026 revenue, with a new AI credit model targeting Adobe’s customer base
• Wall Street remains split: 17 buys vs. 15 holds and 4 sells, with a mean price target of $413.60
• Analysts forecast FY2026 EPS of $23.46 (+12.1% YoY) and revenue of $26.04B, but institutional underweighting sits at a four-year extreme

Adobe (ADBE) has had a rough year. The stock is trading around $259 — near its 52-week low — after hitting a high of $453 just months ago.

Adobe Inc., ADBE

That’s a 43% decline, and the pain isn’t coming from just one direction.

A sector-wide software selloff in February wiped out roughly $1 trillion in market value. Adobe fell between 2.5% and 5.4% in a single session on February 18, alongside names like CrowdStrike, Intuit, and Atlassian. The S&P 500 Software and Services sector dropped 1.7% that day, with more than 90% of its components trading lower.

The trigger? AI disruption fears. Investors are questioning whether legacy software companies can hold their ground as AI-native competitors gain momentum.

Figma is the clearest threat to Adobe right now. On February 19, Figma jumped roughly 14% after forecasting 2026 revenue of $1.36 to $1.37 billion — beating estimates by nearly $80 million. It also announced a new AI credit monetization model set to launch in March 2026, directly aimed at Adobe’s design software customers.

That’s not a distant threat. That’s a direct shot.

Adobe’s forward earnings multiple has more than halved over the past year, falling from around 44 times to current compressed levels. The market is repricing Adobe from dominant incumbent to a company fighting on two fronts.

What Analysts Are Saying

Despite the selloff, the fundamental picture hasn’t collapsed. Consensus estimates still project FY2026 revenue of $26.04 billion, up 9.5% year-over-year. Normalized EPS is forecast at $23.46, up 12.1%, with net income margins holding at 36.6%.

Those aren’t the numbers of a broken business. But the stock is priced like one.

Wall Street leans bullish but conviction is slipping. As of February 20, the breakdown is 17 buys and 3 outperforms against 15 holds and 4 sells. The mean price target sits at $413.60, implying nearly 60% upside from current levels.

The target range tells the story of how divided sentiment really is — from a bear case of $270 (barely above where the stock trades today) to a bull case of $605.

On January 5, Jefferies analyst Brent Thill downgraded ADBE from Buy to Hold, cutting his price target from $500 to $400. The firm recommends investors stay underweight software overall, pointing to moderating growth and noting that stronger AI-related revenue will be needed to ease disintermediation concerns.

Baird’s Robert Oliver held his Neutral rating on January 14 but trimmed his target from $410 to $350 — still implying roughly 33% upside.

Institutional Activity Is Mixed

Not everyone is running for the exits. Coatue Management raised its Adobe stake by 43.2% to 874,150 units as of December 31, 2025.

On the other side, Mubadala Investment Co. cut its position by 49% over the same period, down to just 11,570 units.

Institutional underweighting in software now sits at its most extreme level since 2021.

On the real-world side, Adobe client Havas is using Adobe tools to cut advertising production costs by up to 50%, which the company points to as evidence its enterprise moat remains intact.

A mid-case valuation model targets Adobe at $388.90 by November 2030, implying a 50.4% total return from current levels.

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