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ADBE: Adobe Stock Down by 13% due to Poor Growth in Revenue Guidance

ADBE−2.43%CRM−0.74%

Key points:

• Adobe shares slide 13%
• Stock is down bad this year
• Traditional sort of AI products do not encourage the traders

Photoshop maker expects to report $5.63 billion to $5.68 billion in revenue for its fiscal first quarter. But investors wanted more.

Adobe stock ADBE had its worst session in about two years because, after the software company shared its earnings and outlook, the forward looking numbers showed the shares to be worse than expected, leading to a 13.7% decline. Adobe’s revenue for the completed fiscal fourth quarter came in after the bell on Wednesday and unveiled that the corporation reported profits of $4.81 per share, while Wall Street estimated that the firm would merely record profits of $4.66 per share. The company reached the revenues of $5.61 billion, which is 11% more than in the same period a year before and $0.07 billion more than expected.

Adobe expects the third quarter, its fiscal first three months, to result in revenue of between $5.63 billion and $5.68 billion. It came in below Wall Street’s forecast of at least $5.73 billion and that is why investors had to frustratingly dump some stocks. Adobe was still able to boost fiscal 2025 outlook to a range of $23.3 billion to $23.6 billion, which also falls short of the $23.8 billion analysts’ forecast.

Adobe has lagged behind its tech and software industry counterparts for most of this year. As more and more giants prepare for the rush to AI- and-software plays like Salesforce CRM, up 35% this year, showing that the Photoshop maker is down 18% on the year, as investors do not perceive any AI-infused improvement to the company’s products, platforms or services. Adobe’s AI game, the Firefly image generation product, is unable to fly alongside the AI incorporated into the Creative Cloud.