Heightened AI Competition Fuels Analyst Skepticism on Adobe (ADBE)

Adobe Inc. (NASDAQ:ADBE) is one of the most undervalued AI stocks to buy now.

Investors are currently skeptical of Adobe Inc. (NASDAQ:ADBE) amid heightened competition from AI-powered tools. AI coding systems directly hamper the company’s core creative franchise, as they enable the easy building of competing solutions, eliminating the need for costly software packages.

Therefore, only 55% of analysts who cover the stock are bullish on Adobe Inc. (NASDAQ:ADBE) as of February 25, 2026. This is a significant decline from a year ago, when roughly 72% of the covering analysts were bullish on it. Yet the consensus price target currently reflects upside potential of approximately 60%.

At the same time, Adobe Inc. (NASDAQ:ADBE) faces share price pressure as sentiment continues to weaken amid AI disruption. Having experienced a share price decline of roughly 25% and over 40% on a YTD and one-year basis, the stock reached its 52-week low on February 24, 2026.

AI remains a threat to software stocks, prompting Polar Capital to sell almost all of the firm’s stake in Adobe Inc. (NASDAQ:ADBE) and other software companies such as SAP SE, ServiceNow, and HubSpot. On February 16, 2026, one of the firm’s analysts, Nick Evans, said, “We think application software faces an existential threat from AI.”

Adobe Inc. (NASDAQ:ADBE), a global technology company, delivers digital marketing and media solutions. The company enables individual consumers and businesses to create, publish, and promote content, as well as utilize its eLearning, technical document publishing, web conferencing, document and forms platforms, web app development, high-end printing, and Adobe Advertising solutions.

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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