Adobe Stock Has Soared 45% From Its 2026 Lows, But It May Already Be Too Late to Buy ADBE

Adobe (ADBE) stock has whipsawed this year amid the ongoing debate over the disruption of artificial intelligence (AI) in regard to legacy software companies and their business models. ADBE stock fell to a low of $190.12 following the company's fiscal second-quarter 2026 earnings release in June, but shares have since rebounded 45%. 

To be sure, Adobe's Q2 earnings were better than expected, and the company also raised its annual guidance. That’s what markets ask for in earnings calls, and they usually send stocks north on such reports. However, during the earnings call, Adobe also announced that CFO Dan Durn would depart the company to join Marvell Technologies (MRVL). Previously, during the Q1 earnings call, Adobe had announced the departure of long-time CEO Shantanu Narayan. Losing both the CEO and CFO within three months is hardly a positive development for any company, even though fresh talent can offer new perspectives at times.

Meanwhile, following the Q2 earnings report, I noted that ADBE stock was a buy despite all the noise around AI eating the lunch of software behemoths like Adobe. The stock has since seen a spectacular rally, even as the AI trade in chip and memory companies has looked shaky. With that in mind, let's discuss whether Adobe is still a buy or whether it is a bit too late to enter the stock now.

Adobe Stock Forecast

To begin, let’s look at analyst sentiment. Brokerages have mostly been turning bearish on Adobe stock this year, although there have been some outliers. Last month, HSBC upgraded ADBE stock from a “Hold” to a “Buy” while raising its price target from $282 to $308. CLSA also initiated coverage of Adobe stock with an “Outperform” rating and a price target of $300 per share.

Overall, however, the analyst action has been bearish. Currently, only nine of the 38 analysts tracked by Barchart rate Adobe stock as a “Buy” or equivalent. Three months ago, that number was 14. The mean target price has also come down to $259.82, which is below where shares trade today. The Street-low target price on ADBE stock is $190, while the Street-high target price of $380 implies potential upside of 38% from current levels.

Should You Buy ADBE Stock Now?

Names like Adobe are a play on AI disruption. On one extreme are those who predict the end of software companies in the AI era. Meanwhile, others believe that AI is a bubble and that the technology won’t be as disruptive as it has been made out to be. There is also a school of thought, which I belong to, that subscribes to the idea that AI is both an opportunity and a threat for software companies.

Adobe has a strong moat and has largely held its ground against free and cheaper alternatives like Canva. It also boasts significant recurring revenues through subscriptions. The company reported annualized recurring revenue (ARR) of $27.1 billion at the end of Q2.

The company is pivoting to a freemium model and expects it to be a headwind for ARR growth in the short term, but is optimistic about delivering double-digit growth in the metric. That said, over the medium to long term, converting customers from the free plan to paid plans will be crucial for Adobe’s success.

Amid the recent surge, Adobe’s valuation multiples have expanded, and it now trades at a forward price-to-earnings (P/E) multiple of 13.7 times. While the multiples might not be as mouthwatering as they were when ADBE stock plummeted below $200, they are still not exorbitant. The company is expected to post earnings growth of 15% in the current fiscal year and 13% earnings growth in fiscal 2027.

Overall, I would argue that, while Adobe’s risk-reward is not as attractive as it was in June when the stock fell to multiyear lows, ADBE stock can still rise from these levels. However, given the way the AI trade has whipsawed between chipmakers and software companies, I would be a bit wary of adding shares at these levels and would rather take some profits off the table after the recent rally.