EU Retaliation Tariffs Renew Trade Risk Concerns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 20 2026
0mins
Should l Buy ADBE?
Source: Benzinga
- Tariff Risk Resurgence: EU retaliation tariffs are back in focus, reviving trade risk concerns as markets attempt to stabilize, with potential second-order effects on supply chains and margins particularly impacting globally exposed industrials and multinationals.
- Credit Card APR Cap: The credit card APR cap effective January 20 has quickly emerged as a significant risk for financials, raising concerns about margin compression and reduced credit availability, even if the policy is temporary or subject to revision.
- Software Sector Pressure: The software industry is once again acting as a release valve in a risk-off environment, with investors selling high-multiple growth stocks like Snowflake and Salesforce amid policy uncertainty, leading to significant downward pressure on these stocks.
- Consumer Lending Reaction: Stocks tied to consumer lending and payments, such as SoFi and American Express, are reacting to headline risks before any actual policy details are finalized, indicating a notable market response despite the lack of concrete policy changes.
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Analyst Views on ADBE
Wall Street analysts forecast ADBE stock price to rise
24 Analyst Rating
17 Buy
6 Hold
1 Sell
Moderate Buy
Current: 262.500
Low
310.00
Averages
454.52
High
660.00
Current: 262.500
Low
310.00
Averages
454.52
High
660.00
About ADBE
Adobe Inc. is a global technology company. The Company's products, services and solutions are used around the world to imagine, create, manage, deliver, measure, optimize and engage with content across surfaces and fuel digital experiences. Its segments include Digital Media, Digital Experience, and Publishing and Advertising. The Digital Media segment is centered around Adobe Creative Cloud and Adobe Document Cloud, which include Adobe Express, Adobe Firefly, Photoshop and other products, offering a variety of tools for creative professionals, communicators and other consumers. The Digital Experience segment provides an integrated platform and set of products, services and solutions through Adobe Experience Cloud. The Publishing and Advertising segment contains legacy products and services. In addition, its Adobe GenStudio solution allows businesses to simplify their content supply chain process with generative artificial intelligence (AI) capabilities and intelligent automation.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Acquisition Boosts Development: Wix's acquisition of startup Base44, which focuses on no-code mobile app development, is projected to achieve $50 million in annual recurring revenue by the end of 2025, further enhancing Wix's product offerings and driving future growth.
- Adobe's Undervalued Stock: Adobe's stock has fallen nearly 45% over the past year, currently priced at $258, significantly below its average target price of $429; despite facing AI competition, the company posted record revenue of $6.2 billion last quarter, demonstrating strong market demand and ongoing customer growth potential.
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See More
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- Market Concerns Over AI Disruption: Despite Wix and Adobe's solid business performance, fears of AI potentially disrupting existing software businesses have led to Wix's stock plummeting nearly 70% over the past year and Adobe's by almost 45%, reflecting investor anxiety about increasing competition.
- Wix's Growth Potential: Wix's latest earnings report indicates a revenue growth acceleration to 14%, suggesting strong market demand in the low-code website development space, and the new AI tools being developed are expected to further expand its addressable market and enhance future growth prospects.
- Adobe's Financial Performance: In spite of AI competitive pressures, Adobe posted record revenue of $6.2 billion last quarter and initiated share buybacks at a discount, demonstrating its ongoing appeal in the creative industry and robust customer base, with expectations for continued revenue growth.
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See More
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- AI Disrupts Traditional Software: The rise of Anthropic poses significant challenges to traditional software companies like Workday and Salesforce, particularly in the application of AI technology, threatening their market share and customer loyalty.
- Surge in Capital Expenditures: Tech giants like Amazon and Google have significantly raised their capital expenditure outlooks, with Amazon projecting spending to reach $200 billion, far exceeding the $147 billion consensus, which could impact stock performance and investor confidence.
- Intensified Market Competition: The rapid advancement of AI technology raises questions about the value of enterprise software, leading investors to adopt a pessimistic view on the future of traditional software companies, especially in labor-intensive areas that may face workforce reductions due to AI adoption.
- Investor Confidence Shaken: Despite significant advancements by companies like Anthropic and OpenAI in the AI space, market confidence in traditional software companies is waning, resulting in poor stock performance over the past six months and raising concerns about future profitability.
See More
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- Strong Revenue Growth: ServiceTitan reported a 25% year-over-year revenue growth in Q3 of fiscal 2025, with an annual revenue run rate nearing $1 billion, demonstrating resilience in the SaaS market despite overall turbulence due to AI concerns.
- Unique Market Positioning: The company focuses on providing software for HVAC, roofing, plumbing, and other skilled trades, catering to specific needs and avoiding direct competition with large enterprise software, thus remaining relatively insulated from AI disruptions.
- Improved Profitability: ServiceTitan's non-GAAP operating margin increased from 0.8% to 8.6% year-over-year, indicating significant progress in cost optimization and efficiency, enhancing its future profit potential.
- AI Application Prospects: Executives mentioned integrating AI technologies into their platform during the latest earnings call, indicating that ServiceTitan not only embraces AI but plans to leverage it to enhance software performance, maintaining a competitive edge.
See More
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- Market Recovery: The S&P 500 index rose by 0.05%, the Dow Jones Industrial Average by 0.10%, and the Nasdaq 100 by 0.18% on Friday, indicating a recovery after early losses, reflecting cautious optimism among investors regarding future economic prospects.
- Inflation Data Impact: The U.S. January Consumer Price Index rose by 2.4% year-over-year, below the expected 2.5%, marking the smallest increase in seven months, which may prompt the Fed to continue cutting rates, thus providing support for the stock market and alleviating concerns over rate hikes.
- Strong Software Stock Performance: Software stocks like Crowdstrike Holdings and ServiceNow rose over 4% and 3%, respectively, lifting the broader market and indicating a rebound in investor confidence in tech stocks, particularly amid rapid advancements in AI technology.
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See More
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- Market Overreaction: The iShares Expanded Tech-Software ETF has dropped 30% since late October due to fears of AI competition, yet high switching costs may prevent businesses from easily changing software providers, suggesting future earnings could be more predictable than the market anticipates.
- Microsoft's Growth Potential: Microsoft 365 Commercial sales rose 14% year-over-year, with consumer sales up 27% and Dynamics 365 sales increasing by 17%, showcasing strong software performance under AI integration, while its forward P/E ratio stands at just 24, indicating a low valuation.
- Atlassian's Cloud Transition: Atlassian is pushing customers to its cloud-based platform, achieving a 120% net revenue retention rate for cloud customers in fiscal 2025, with momentum expected to continue into 2026; despite a forward P/E of 21, management forecasts an 18% revenue growth.
- Adobe's AI Integration: AI-influenced products accounted for one-third of Adobe's annual recurring revenue, and despite fears of AI displacing its software, its recurring revenue continues to grow at a double-digit pace, with the stock currently trading at less than 12 times forward earnings, highlighting its attractiveness.
See More
