ADBE
The vibe shift
Adobe woke up Monday and immediately got a less-than-adoring note from Mizuho. Analyst Gregg Moskowitz cut the stock from Outperform to Neutral and chopped the price target to $270 from $315, which is Wall Street’s way of saying, “Nice story, but we’re not buying the hype here.”
Why the mood got colder
The new thesis is pretty simple: competition is getting crowded and cheaper. Mizuho said Adobe is feeling more pressure in the prosumer and small-business lanes, where lower-cost creative tools and newer AI platforms are nipping at its heels like a pack of hungry startups.
And this isn’t just about market share theater. The firm also sees a tougher runway for growth, expecting Adobe’s organic revenue and annual recurring revenue growth to settle into the high-single-digit range over the next two to three years. That’s fine in normal times, but for a premium software name, it’s not exactly a fireworks show.
The margin question hanging over the stock
The other shoe? Margins. Mizuho warned that Adobe may have to spend more on AI features just to keep its moat from turning into a very expensive kiddie pool. That can be great for product relevance, but it also means the company could be trading profitability for defense.
- What changed: a downgrade to Neutral
- What else changed: price target cut to $270
- What investors should watch: whether Adobe can prove AI is a growth engine, not just a costly arms race
Big picture
Adobe is still a heavyweight, but this note is a reminder that even the classics can get side-eyed when the market decides the next big thing might also be the next cheaper thing. For investors, the question isn’t whether Adobe is a good company — it’s whether it can stay a great stock when the competition is getting louder.