Adobe Stock Buy Or No

Adobe Stock Buy Or No by Adam Rosen last updated on June 18, 2026

Adobe Stock: Opportunity or Trap?

There's a very real fear that AI will bring the end of Adobe's Era. If we look at Adobe's stock performance in the last 2 years, it is really struggling.

Adobe is trading at a forward P/E of 11.5, which is quite low for a big tech company like this. Also, Adobe's CEO is departing at a time when AI is posing serious threats to the future of the company.

Adobe's Growth Is Above 10%

Despite all the fears and talk about AI advancement, the reality is a little different. Adobe's growth is still above 10%, and it has a lot of cash on its hands. In 2025, Adobe's FCF was $10 billion, and its margin was 41%.

A decline was in the Adobe stock price in March 2026. At that time, the Q1 revenue came up short against the forecasts. The reason for this was the intense competition faced by Adobe's Creative Cloud.

Other competitors like Figma and Canva are slowly increasing their market share. Canva has 260 million active users each month, and Figma has also found a stronghold for enterprise design workflows.

Amidst all of this, there's also a fear that AI will make Adobe obsolete. After all, AI can do complex tasks in seconds at a very low cost or even freely in many cases. So, why would someone buy an expensive subscription for a professional grade software?

The data shows that the annual recurring revenue of Adobe is growing at an 11% rate. By the end of Q1, the ARR was $26 billion. Also, the remaining performance obligations of Adobe are $22 billion. So, the reality is that Adobe is doing really well despite all the challenges.

It appears that the market is focusing too much on threats and discarding the positive things. In FY2025, the free cash flow of Adobe was $9.8 billion, which is an increase of 24% y/y.

Also, the management is using the money to build its own AI tools. One such project is Adobe Firefly, which is also gaining traction slowly.

Considering the challenges and the strong growth, it is clear that Adobe stock looks really cheap. It is only trading at a forward P/E of 11.5, which makes its valuation very attractive.

So, it is safe to say that the AI fears are a little overblown. Sure, AI is making things a little difficult, but Adobe is still doing really well!