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    Adobe (ADBE) Is Up 5.4% After AI-Focused Q4 Results and Semrush Deal - Has The Bull Case Changed?

    Simply Wall St·12/10/2025 18:15:36
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    • Adobe reported its fiscal fourth-quarter and full-year 2025 results on December 10, after markets closed, against a backdrop of intense focus on how generative AI is reshaping demand for its core creative and marketing tools.
    • At the same time, investors have zeroed in on Adobe’s aggressive share buybacks and planned Semrush acquisition as key tests of whether management can turn AI investments into durable subscription and marketing-technology revenue.
    • We’ll now examine how Adobe’s progress in monetizing AI features, highlighted ahead of this earnings release, reshapes its longer-term investment narrative.

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    Adobe Investment Narrative Recap

    To own Adobe today, you need to believe its creative and marketing cloud can keep absorbing generative AI rather than being hollowed out by it. The near term catalyst is clear proof in upcoming results that AI features are adding to subscription and ARR growth, not just usage. The biggest risk is that rising AI and cloud costs, plus heavier investment, start to squeeze margins without a visible payoff; the latest pre earnings commentary does not materially change that.

    Among the recent announcements, the planned US$1.9 billion Semrush acquisition stands out because it ties directly into that AI monetization story. If Semrush’s SEO and “generative engine optimization” tools plug cleanly into Adobe Experience Cloud and Firefly, they could strengthen the case that Adobe’s AI stack is central to how brands plan, create, and distribute content, which is exactly what many analysts are watching heading into this earnings print.

    Yet, despite this optimism, investors should be aware that growing AI competition and potential margin pressure from higher AI and cloud costs could...

    Read the full narrative on Adobe (it's free!)

    Adobe's narrative projects $29.3 billion revenue and $8.7 billion earnings by 2028. This requires 9.0% yearly revenue growth and about a $1.8 billion earnings increase from $6.9 billion today.

    Uncover how Adobe's forecasts yield a $447.56 fair value, a 30% upside to its current price.

    Exploring Other Perspectives

    ADBE 1-Year Stock Price Chart
    ADBE 1-Year Stock Price Chart

    Some of the most optimistic analysts were assuming Adobe could lift annual revenue to about US$31.2 billion and earnings to roughly US$11.4 billion by 2028, which is a much rosier view than consensus. If you are weighing those forecasts against today’s AI related uncertainty and the Semrush deal, it is worth recognizing how widely opinions differ and considering how this new information might reshape those bullish expectations.

    Explore 88 other fair value estimates on Adobe - why the stock might be worth as much as 75% more than the current price!

    Build Your Own Adobe Narrative

    Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

    • A great starting point for your Adobe research is our analysis highlighting 4 key rewards that could impact your investment decision.
    • Our free Adobe research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Adobe's overall financial health at a glance.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.