Baird Slashes Adobe (ADB) PT to $350 Amid AI Competition, Growth Hurdles

Adobe Inc. (NASDAQ:ADBE) is one of the most undervalued large cap stocks to invest in now. On January 14, Baird reduced its price target for Adobe to $350 from $410 while maintaining a Neutral rating on the shares.

A day before that, Oppenheimer downgraded Adobe from Outperform to Perform and noted that the expected AI-driven growth in the Digital Media business failed to materialize, leading to decelerating growth in FY2025. While the firm views Adobe as a cheap stock with good medium-term opportunities, it expects several factors to limit near-term upside and negatively impact sentiment in 2026. These headwinds include a challenging AI transition environment, uninspiring top-line growth, inconsistent product cycle execution, concerns regarding the company’s competitive moat, weak investor interest in software, and disappointing year-over-year operating margin guidance for FY2026.

On January 11, Goldman Sachs assumed coverage of Adobe Inc. (NASDAQ:ADBE) with a Sell rating and a $290 price target as part of a broader initiation of 12 software sector stocks. While the firm views AI adoption as a positive long-term tailwind for the software industry’s TAM over the next decade, the firm noted that Adobe’s high-end seat count is currently under pressure. This stems from value increasingly accruing at the lower end of the market, where Goldman Sachs believes Adobe has minimal exposure.

Adobe Inc. (NASDAQ:ADBE) operates as a technology company worldwide. The company has a strategic alliance with HUMAIN for the development of generative AI models and AI-powered applications.

While we acknowledge the potential of ADBE as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.