Adobe (ADBE) Stock Forecast & Price Target

Adobe is supported by resilient core demand, with total revenue of $6,760M up 13% year over year and non-GAAP EPS of $6.13 beating consensus, while full-year revenue guidance was raised to $26.6B and EPS to $24.47 at the midpoint. Its growth outlook is further strengthened by AI and freemium momentum, as Firefly ARR rose 40% quarter over quarter, AI-first ARR exceeded $650M and grew 150% year over year, and freemium MAU climbed 70% year over year. Management also guided to about 44% non-GAAP operating margins and maintained 10.2% ending ARR growth, underscoring a high-margin business with durable recurring revenue and improving monetization potential.

Adobe is facing a negative outlook because its core subscription businesses operate in intensely competitive markets, where weaker renewal rates, slower customer conversion, or failure to adapt to new technology could pressure future revenue and operating results. Although creative freemium MAU has passed 100M and AI-first ending ARR grew 150% y/y to $650M, management still held total ARR growth at 10.2% and investors appear unconvinced that these early monetization gains offset near-term ARR headwinds from freemium growth and delayed price increases. The company also faces integration risk from acquisitions and margin pressure from the freemium model, while Q4 net-new ARR being heavily weighted adds execution risk rather than clear evidence of sustained re-acceleration.