Boom, roasted. Adobe just pulled off the classic “beat earnings, tank stock” routine, dropping a brutal 14% after reporting better-than-expected revenue and profit. Why? Because Wall Street doesn’t give a sh*t about what you did last quarter—it only cares about whether you’re the AI tech of the future. And right now, investors are having a hard time believing Adobe is keeping up with every other big swingin’ d**k in the generative AI arms race. 

Live look at investors after Adobe earnings…

(Source: Giphy) 

Let’s start with the receipts: Adobe’s revenue came in at $5.71 billion which beat estimates of $5.66 billion. Earnings per share also saw a big beat, posting $5.08 (expectations were $4.97). Full–year guidance, on the other hand, settled in around $23.3B–$23.55B revenue, $20.20–$20.50 EPS, which was meh, but right in line with estimates. 

So clearly, on paper this should’ve been a win. But Adobe’s AI growth? Yeah, that’s where things got ugly. For instance, AI-related revenue hit $125M this quarter—which sounds nice until you realize that’s a rounding error for a company of Adobe’s size. Now, the company is projecting AI revenue to double by year-end, but the problem is, investors want to see real dominance, not just an “AI feature” here and there. And unfortunately, that’s what Adobe has been accustomed to.

(Source: CNBC) 

Meaning, given the brutal market we’re facing, if you’re not an AI leader—investors don’t just want to know you’re using AI—they want to see you printing money from it like Nvidia. For instance, Bernstein analyst Mark Moerdler straight-up said that investors need to see longer-term trends to believe Adobe is a real AI player. 

Morgan Stanley’s Keith Weiss called Adobe’s AI revenue disclosure “a step in the right direction” but basically admitted that no one is seeing a clear roadmap for how Adobe turns generative AI into a killer business model.  Translation: Adobe’s AI strategy feels like “we’re trying, please don’t leave us behind.” And that’s not gonna cut it when companies like OpenAI, Midjourney, and even Canva are chipping away at Adobe’s creative software dominance.

(Source: Investopedia) 

On the other hand, CEO Shantanu Narayen went on CNBC to do damage control, basically saying, “Not only are we infusing AI into our products, but it’s creating new revenue streams.” Which is cool, but the real question is, is it replacing existing revenue? What about actually growing the business? Not really. 

Bottom line is that Adobe didn’t necessarily do anything “wrong”---but in 2025, that’s not enough. The stock is already down -33% over the past year, meaning if their AI strategy isn’t bulletproof, investors will continue to punish them. 

(Source: Giphy) 

For now though, Adobe is still a powerhouse, but in the AI gold rush, no one wants to bet on the guy still using a pickaxe. And until they can prove they’re leading, things could get worse. In the meantime, keep your eyes on Adobe and place your bets accordingly. As always, stay safe and stay frosty, friends! Until next time… 

P.S. Robert Smalls, a big swingin’ Managing Director for StockBridge dumped $27 million in a little known aerospace company on March 10th. In less than 24 hours, we dropped a deep-dive analysis exclusively for Stocks.News premium members, breaking down the why, what it means, and how to play the aerospace sector moving forward—all while retail investors were still wiping their tears from last week's losses. Meaning, if you aren’t in the Stocks.News premium club, well, it goes without saying that you’re missing out. Don’t miss out. Click here to join ASAP… 

Stocks.News does not hold positions in companies mentioned in the article.