Adobe Forecast Misses Estimates, Renewing Fears About AI Impact

(Bloomberg) -- Adobe Inc. gave an outlook for sales that narrowly missed analysts' estimates, renewing concerns about pressure from artificial intelligence upstarts.

Revenue will be $6.8 billion to $6.85 billion in the quarter ending in November, the company said Wednesday in a statement. The midpoint of that range missed the $6.85 billion average prediction, according to data compiled by Bloomberg.

Profit, excluding some items, will be $6.30 to $6.35 a share, the company said Wednesday in a statement. Analysts estimated $6.30 a share on average.

The shares fell about 3% in extended trading after closing at $248.83 in New York. The stock was already down 29% this year heading into the quarterly report.

The software maker is navigating a crisis of investor confidence over the impact of AI. Known for tools like Photoshop, Adobe's software has long been the standard for creative and marketing professionals. But generative AI has made it easier to produce visual media without the company's expensive products, and many of the most popular new AI tools are built by competitors.

Earlier this week, Adobe named one of its internal division leaders, Anil Chakravarthy, as its next chief executive officer, effective Dec. 1. The decision caught some investors by surprise, as the unit he ran — marketing and analytics software — is much smaller than the company's flagship creative unit. The other leading candidate to become CEO, David Wadhwani, oversaw Adobe's creative business. He will leave the company later this month.