Adobe Forecast Misses Targets as AI Pressures Mount

Adobe gave a sales outlook that narrowly missed analyst estimates on Wednesday, renewing market worries about competition from artificial intelligence startups. The software maker expects revenue of $6.8 billion to $6.85 billion in the quarter ending in November. The midpoint of that forecast fell short of the $6.85 billion average prediction compiled by Bloomberg.

The company expects adjusted profit of $6.30 to $6.35 a share for the period. Analysts had estimated $6.30 a share on average.

Adobe shares fell about 3% in extended trading after ending the regular New York session at $248.83. Heading into the report, the stock had already dropped 29% since the start of the year. Investors remain concerned that generative AI tools from competitors make it easier to generate visual media without Adobe software like Photoshop.

The outlook arrives during a leadership transition. Earlier this week, Adobe appointed internal division head Anil Chakravarthy as its next CEO, effective Dec. 1. Chakravarthy previously ran the marketing and analytics software unit. David Wadhwani, who ran the flagship creative business and was the other leading CEO candidate, will leave Adobe later this month.