JPMorgan lowers Adobe stock price target

Valued at a market cap of $116 billion, Adobe stock has underperformed the broader markets after touching all-time highs in late 2021. Today, Adobe (ADBE) stock is down 63% from those record levels.

Adobe is in the middle of a leadership change and a major bet on artificial intelligence. That combination has made the stock a tricky one for analysts to price heading into next year.

The company just posted a quarter that beat expectations on nearly every measure investors normally watch.

Yet one Wall Street bank still found a reason to lower its price target.

Adobe stock leans on its AI growth story

Adobe's pitch to investors right now centers on user growth first and revenue second. The company is chasing what it calls a freemium strategy, meant to pull huge numbers of new users into its products before ever charging them.

The strategy showed up clearly in Adobe's third quarter fiscal 2026 earnings call on September 10.

Chair and CEO Shantanu Narayen said the company's tools now reach over one billion monthly active users across its businesses, up more than 20% from a year earlier.

Creative freemium monthly active users , which include Firefly and Express, crossed 100 million and grew more than 70% compared with the same period last year.

Adobe also disclosed that Narayen will move into an executive chair role on December 1, and Anil Chakravarthy, currently president of customer experience orchestration, will become the company's next CEO.

Narayen has led Adobe for 29 years and has overseen its growth from under $1 billion in annual revenue to more than $26 billion today.

JPMorgan lowered its price target on Adobe stock to $315 from $340 while keeping an Overweight rating on the shares, according to The Fly .

The analyst told investors that Adobe's fiscal third quarter results were "robust and beat expectations modestly."

Total revenue of $6.76 billion, up 12% compared with a year earlier

Adjusted earnings per share of $6.13, up 15% year over year

Total ending annual recurring revenue of $27.5 billion, up 11.2%

Firefly ending annual recurring revenue up 40% from the prior quarter

Creative freemium users topping 100 million, up more than 70% year over year

Despite that beat, JPMorgan said Adobe's fourth quarter revenue outlook came in modestly below consensus.

The firm tied that softer guidance to Adobe's ongoing focus on user acquisition rather than pricing.

Adobe's current period remaining performance obligations, a measure of contracted future revenue, grew just 9% year over year, its slowest pace since early fiscal 2023.