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Adobe Stock Falls 1.7% After Wells Fargo Downgrade

SEC / Adobe Inc.2 min read8 sources

Why did Adobe stock fall 1.7%?

Adobe (ADBE) stock fell 1.7% to $238.14 on Monday after a Wells Fargo downgrade to underweight, as slowing growth and a survey showing lost AI budget share worried the analyst.

Key numbers

ADBE close, Oct 12 (morning low was -4%)$238.14-1.7%
Morning low vs year-to-date$233.50-4% day, -31% YTD
Wells Fargo price target$225from $270
Wells Fargo fiscal 2027 ARR growth view~7%vs 8%+ consensus
Q3 FY2026 revenue$6.76B+13% YoY
Forward P/E (price vs expected profit)8.9xServiceNow 31x

What happened

Adobe (ADBE) stock fell 1.7% to $238.14 on Monday after a Wells Fargo downgrade to underweight, as slowing growth and a survey showing lost AI budget share worried the analyst. Underweight is a rating that tells investors to hold less of the stock than usual; Wells Fargo cut Adobe from overweight and lowered its price target to $225 from $270. At Monday's low the stock was down about 4% and roughly 31% for the year. Wells Fargo says new subscription sales must nearly double from the last quarter for Adobe to hit its fourth-quarter targets.

Why it matters

Adobe, the maker of Photoshop and Acrobat, is being marked down by Wells Fargo because AI tools may be taking customers' software budgets. In the bank's survey of technology chiefs, 22% said Adobe was losing budget share and 2% said it was gaining. Adobe also changes CEOs on 1 December, and Wells Fargo flags the CEO and CFO changes as a risk to next year's forecast.

Who this affects

Marketmixed
Low impact
Software investors see Adobe lag while most peers rise.
Companybearish
Medium impact
Adobe shareholders face doubts over growth and leadership changes.
Competitorsbullish
Low impact
Rivals in AI creative tools could win budget Adobe loses.
Industrybearish
Low impact
Creative software faces pressure as AI budgets shift.

Adobe vs Salesforce, ServiceNow, Intuit, Autodesk

AdobeADBE$92.7B-1.7%-29.4%8.9x
SalesforceCRM$192.5B+2.1%-3.2%15.9x
ServiceNowNOW$145.1B-0.4%-21.1%31.0x
IntuitINTU$81.8B+1.1%-52.3%12.8x
AutodeskADSK$48.8B-0.8%-23.1%18.0x

As of 2026-10-12

How we got here

  1. Adobe reports Q3 revenue of $6.76B, up 13%, with $27.5B in annual recurring revenue.

  2. Wells Fargo cuts Adobe to underweight from overweight; one report says equal weight.

  3. Adobe trades about 4% lower at the low, then closes down 1.7% at $238.14.

What to watch

  • Anil Chakravarthy takes over as CEO from Shantanu Narayen, a change Wells Fargo flags as a risk.2026-12-01
  • Adobe's fourth-quarter results and fiscal 2027 outlook, which Wells Fargo says face guidance risk.Q4 2026
  • Whether other analysts follow; consensus is Hold with an average target of $263.59.Q4 2026

Educational content only. Not investment advice.

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