Adobe’s stock has dropped by more than 13% because it released weaker-than-expected revenue projections.
👉 Background: Adobe is the OG design software powerhouse behind Photoshop, Illustrator and Premier Pro tools. It also created the PDF format back in the '90s. But gone are the days when designers couldn’t live without Adobe... because hello to the emergences of Canva, Figma and other competitors.
👉 What happened: Now Adobe’s stock has dropped by more than 13% because it released weaker-than-expected revenue projections - especially for its AI product, Firefly, which it launched in March 2023.
👉 What else: Investors are particularly concerned because competitors like Canva, Midjourney and Runway have released their own AI design offerings, making this market even more competitive.
💡After more than two years in the market, AI has become a baseline expectation for software companies rather than a unique selling point.
💡For Adobe, this means that having AI features like Firefly isn’t enough. Adobe’s R&D expenses hit $2.6 billion for the nine months ending on September 1, 2023, with the bulk going into the AI development.
💡So Adobe's investors are getting impatient and want to see a return on this investment soon - or otherwise, they'll design up a storm elsewhere.
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