Adobe faces slowing growth and investor skepticism as AI tools threaten its creative software dominance

Adobe and Apple are finding themselves on the wrong side of investor sentiment as the artificial intelligence boom redraws the technology ￰0￱ companies remain profitable with formidable global brands, yet analysts increasingly question whether either can keep pace in a market that rewards visible, fast-moving AI strategies. A creative software giant under pressure Once the dominant force in creative software, Adobe is struggling to convince Wall Street that its tools remain indispensable when rivals can now generate images from simple text ￰1￱ of its fiscal third-quarter results, due Thursday, analysts forecast revenue growth of just 9.3% and earnings per share up 7%.

While respectable in absolute terms, full-year sales growth of around 10% would mark Adobe’s slowest pace in more than a ￰2￱ suggest growth could continue to recede each year through ￰3￱ stock has lost more than 20% this year and is down by about half since the end of 2023, even as an exchange-traded fund tracking software stocks gained more than 40% over the same ￰4￱ have compressed sharply, with shares trading at less than 16 times earnings, their lowest multiple in more than a ￰5￱ Barbetta, co-leader of Wellington Management’s technology team, said that “AI image generation that replaces stock photography and image-editing software is the most obvious example of where we’re already seeing disruption.” He said, “AI companies are growing so quickly that it really seems like it is coming at the expense of legacy names.” Apple sentiment hits five-year low If Adobe is the poster child for disruption fears, Apple is gradually becoming a cautionary tale of what happens when innovation ￰6￱ iPhone maker was hit with two downgrades on Thursday, pulling its recommendation consensus to 3.9 out of 5, the lowest since early ￰7￱ 55% of analysts tracked by Bloomberg now rate Apple a “buy,” an unusually weak endorsement for a megacap ￰8￱ are down 9% so far in 2025, compared with a 14% gain for the Nasdaq ￰9￱ it’s worth noting that despite the year’s outlook, Apple has rallied a 30% jump since its April low, which was a by-product of President Trump’s tariffs.

Apple’s stock has had a rough 2025 despite a recent recovery.