Adobe stock whipsaws despite initial earnings rally

Adobe stock fails to hold on to gains from initial earnings rally.
Markets mixed as poor economic data from the University of Michigan makes rounds.
Michigan Consumer Sentiment and Consumer Expectations for September miss consensus.
AI-inflected revenue at Adobe reaches $5 billion ARR during Q3.

Clay Webster FXStreet

Adobe (ADBE) sank 1% lower on Friday morning despite rallying 3.5% higher in the premarket following Thursday's post-market earnings release. Then Adobe stock recovered to even just before lunchtime in New York, and uncertainty seems to be the vibe at the end of the week.

The Dow Jones Industrial Average (DJIA) is trading down 0.4% on Friday after triumphing over other indices to rise 1.4% on Thursday to all-time highs. In a mirror image, the NASDAQ Composite has gained 0.4% midway through Friday's session.

The market is somewhat ruffled by poor US economic data out on Friday. Preliminary Michigan Consumer Expectations and Consumer Sentiment indices both missed the consensus market for September, and the preliminary September University of Michigan 5-Year Consumer Inflation Expectation rose from 3.5% to 3.9%.

FXStreet Economic Calendar / September 12, 2025

Adobe stock news

The graphic design software company is not showing any wear from artificial intelligence or worrisome competition from newly public Figma (FIG), a company it tried and failed to buy for $20 billion back in late 2022.

Adobe earned $5.31 in adjusted earnings per share (EPS) in the third quarter on $5.99 billion in revenue. The EPS figure beat the Wall Street consensus by $0.13 or 2.5%. Revenue rose nearly 11% YoY, beating the consensus by $80 million.

Management pushed up full-year 2025 revenue guidance midpoint by $110 million to $23.68 million. Full-year guidance for adjusted EPS of $20.83 was also $0.25 above the consensus.

The market initially appeared to rise due to Adobe touting that the quarter saw "AI-influenced" annual recurring revenue rise above $5 billion.

"AI represents a tectonic technology shift and presents the biggest opportunity for Adobe in decades," said CEO Shantanu Narayen.

David Wadhwani, President of Digital Media, reported that AI system engagement rose 50% QoQ.

Adobe stock forecast

From a technical perspective, the earnings release is not positive for shareholders. With Oracle (ORCL) and Broadcom (AVGO) earnings leading to enormous rallies in their share prices, the market will view the reticence for Adobe stock as a major negative.

Adobe stock has been trending lower all year and is clearly in a downtrend. Recent lows in April and August saw the share price drop to the low $330s. Bears will expect that Friday's quick profit-taking off the initial rally will force ADBE to retest that region.

The September 2022 lows, which came in the wake of Adobe's plan to acquire Figma, near $280, are also in the cards if the $330s fail to hold up. Adobe stock needs to close above the 100-day Simple Moving Average (SMA), currently near $375, in order to regain bulls' confidence.

ADBE daily stock chart

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Author

Clay Webster

FXStreet

Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.

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