Software Stocks Hit Hard by AI Concerns, Intuit and Others See Sharp Declines
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: seekingalpha
- Weak Software Performance: Renewed anxiety over AI disruption has led to a poor start for software stocks this year, with Morgan Stanley's SaaS index down about 15%, marking the worst opening since 2022 and reflecting growing investor caution regarding long-term growth expectations.
- Erosion of Traditional Software Value: Concerns that AI tools could undermine the value of traditional software products were reignited by a recent release from AI startup Anthropic, causing sharp declines in shares of Intuit, Adobe, and Salesforce, which further exacerbated market unease.
- Increasing Industry Divergence: While the Nasdaq 100 approaches record highs, many software stocks are languishing at multi-year lows, indicating that incumbents have yet to demonstrate meaningful revenue acceleration from their AI initiatives, leading to diminished confidence in future growth.
- Valuations at Historic Lows: Despite software stock valuations falling to historic lows, with Morgan Stanley's basket trading at roughly 18 times forward earnings, well below historical averages, investor confidence remains weighed down by uncertainty over how AI will reshape the software business model, leaving the sector still searching for a catalyst.
Analyst Views on ADBE
Wall Street analysts forecast ADBE stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ADBE is 459.91 USD with a low forecast of 280.00 USD and a high forecast of 590.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
26 Analyst Rating
18 Buy
7 Hold
1 Sell
Moderate Buy
Current: 304.090
Low
280.00
Averages
459.91
High
590.00
Current: 304.090
Low
280.00
Averages
459.91
High
590.00
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.
