Adobe is one of the software stocks that had been sold off amid earlier fears of “AI disrupting everything.” The market worried that native AI companies would upend traditional software business models, weakening enterprise software pricing power, revenue growth, and profit margins. After more than two consecutive years of declining share prices, the creative software giant announced that it will repurchase up to $25 billion of its own stock in the future. Dan Durn, Chief Financial Officer of Adobe (ADBE), stated in a press release that this new repurchase authorization, effective until April 2030, is a direct reflection of the company’s confidence in its robust cash flow and its ability to create long-term value for investors. This buyback plan replaces another $25 billion program announced in March 2024, which is nearing completion. Boosted by this news, Adobe’s stock rose nearly 2% in after-hours trading on Tuesday. Data shows that Adobe’s stock price fell approximately 25% and 21% in 2024 and 2025, respectively, and has declined over 29% so far this year.
For Adobe, generative AI allows users to create visual content without the need for its expensive software: OpenAI’s Sora can directly generate high-definition videos, Midjourney can quickly produce artistic illustrations, and Canva packages professional design into easy-to-use templates. Meanwhile, traditional competitors are also accelerating their AI upgrades—Canva continues to enhance its Magic Studio suite of AI features, while Figma has released several AI tools directly benchmarked against Adobe’s core product lines.
In fact, Adobe itself is actively embracing the AI wave, with its strategic core being its proprietary generative AI model, Firefly. As of April 2025, users have generated over 22 billion assets cumulatively using Firefly. Additionally, the Firefly Foundry service allows brands to train custom AI models based on their own proprietary materials. However, these efforts have not yet translated into tangible revenue. One investment manager noted that although Adobe has fully integrated AI capabilities, investors see users completing tasks faster rather than an increase in users or higher subscription revenue. The deeper paradox Adobe faces is this: the more powerful AI becomes, the lower the value of unit work; and the more ubiquitous AI tools become, the smaller the premium for professional skills.
Amid market doubts about whether Adobe can maintain its leadership in the AI era, the company’s Chief Executive Officer, Shantanu Narayen, announced his resignation last month. After serving as CEO for 18 years, Narayen will remain in his post until a successor is determined. According to analysts at market research firms, this transition has raised external questions about the continuity of the company’s strategy and the pace of its innovation. Notably, to address competitive pressures, Adobe on Monday launched a set of AI tools designed to help enterprise customers automate and personalize digital marketing, and is collaborating with multiple tech companies, including Amazon, Microsoft, OpenAI, and others, to expand the platforms on which its systems operate.
