Aug. 11 at 6:49 PM
ADBE -1.69% fell after Melius Research downgraded to Sell from Hold, warning AI-native rivals threaten Adobe’s model. Analyst Ben Reitzes said “AI is eating software,” with Big Tech (GOOG -0.28%, GOOGL -0.27%, MSFT +0.45%) and apps like Canva and FIG +3.98% offering free/low-cost AI tools that undercut Creative Cloud pricing.
Reitzes sees Firefly as “difficult to monetize” and expects reliance on price hikes or new tiers to accelerate customer migration, pressuring net new ARR. He compared the risk to CRM -2.22% and WDAY -3.78% facing Dell’s 2010s decline when cloud overtook on-premise. Large infra players like MSFT and ORCL +1.59% may capture more industry value.
Bulls push back — Goldman Sachs forecasts AI could add $ 4B TAM, with Firefly integration boosting growth and 70% upside potential. Bernstein also sees rising content demand from expanding AI app ecosystems as supportive for ADBE.
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