Adobe’s AI Strategy Faces Market Scrutiny Amid Strategic Moves

Adobe finds itself navigating a complex landscape where its ambitious artificial intelligence strategy is being questioned by Wall Street even as the company makes tangible progress on acquisitions and product clarity. The central question for investors is whether the firm's concrete advancements can outweigh perceived structural risks in an AI-disrupted market.

In a significant step forward for its growth plans, shareholders of Semrush Holdings voted overwhelmingly on February 3, 2026, to approve the company's acquisition by Adobe. The transaction is structured as an all-cash deal valued at $1.9 billion, equating to $12.00 per Semrush share. Strategically, the move is designed to integrate more marketing intelligence and SEO capabilities into Adobe's Digital Experience segment. Following this shareholder approval, the deal's completion now rests on meeting final regulatory conditions.

Analyst Downgrade Highlights Subscription Model Concerns

Market sentiment took a notable turn on February 3 when analysts at Piper Sandler revised their rating on Adobe shares from "Overweight" to "Neutral." The adjustment was driven less by near-term quarterly performance and more by a broader, long-term concern: the potential for AI to automate workflows so extensively that it pressures the traditional seat-based software licensing model.

Piper Sandler also made a substantial reduction to its price target, cutting it to $330 from a previous level above $470. The analysts pointed to new automation tools from AI competitor Anthropic as a catalyst for their reassessment. The core issue revolves around "agentic" AI capable of independently executing complex workflows—a development that could alter the growth narrative for many software providers. This aligns with a wider market re-evaluation of what were once considered stable software moats in the generative AI era.

The market reaction has been pronounced. Over the past 30 days, Adobe's stock has declined approximately 16%, with shares currently trading near $281.20—close to a 52-week low.

Should investors sell immediately? Or is it worth buying Adobe?

Product Portfolio Adjustments and Operational Focus

On the operational front, Adobe provided clarity on February 4 regarding its creative software suite. In response to previous criticism and market uncertainty, the company announced it is placing Adobe Animate into "Maintenance Mode." The software will remain available and receive security updates but will no longer undergo active feature development.

Concurrently, Adobe is expanding its educational initiatives. In the United Kingdom, the company revealed a partnership with the government to enhance AI literacy and digital skills within local communities, specifically in Barnsley as part of the "Tech Towns" program.

Upcoming Financial Test

All eyes now turn to the upcoming quarterly report, which will serve as a critical benchmark. Adobe is expected to release its Q1 2026 results around mid-March (estimated March 11–12). For the first quarter, management previously issued an EPS guidance range of $5.85 to $5.90. The full-year 2026 forecast calls for EPS between $23.30 and $23.50. These results will be closely watched for evidence that the company can sustain its growth trajectory in a market where AI is redistributing efficiency gains at an unprecedented pace.

Key Developments at a Glance:
* Piper Sandler downgrades stock to "Neutral" (February 3)
* New price target set at $330 (down from >$470)
* Semrush shareholders approve merger (February 3, 2026)
* Acquisition valued at $1.9 billion, structured as an all-cash transaction