Adobe's AI tools not enough to fend off competition
Adobe, once the go-to for creative tools, is now feeling the pressure as Figma and Canva win over millions with innovative AI features and friendlier prices.
While Adobe has added AI to Photoshop and Creative Cloud, some analysts question whether these upgrades will deliver sustained profit growth, even as competitors keep growing.
Investors are worried about high subscription costs
Morgan Stanley points out that Adobe's recurring revenue is shaky because of all this new AI competition.
The company beat earnings forecasts, but its stock still dropped more than 18% in 2025—investors are worried about high subscription costs and free or cheaper alternatives.
Plus, there's backlash over too many AI-generated images in its stock photo library, with some critics concerned this could make its content less valuable.
Adobe is betting big on 'agentic AI'
Adobe is betting big on "agentic AI"—think smart assistants that help automate creative work across cloud platforms.
The goal: make workflows smoother and more personal.
But even with this push, some analysts and investors aren't convinced that these new AI tools will boost profits as rivals keep stepping up their game.