Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTPeace LongeSun, June 14, 2026 at 7:47 PM GMT+2 4 min readAdobe (ADBE), the software maker behind Photoshop and Acrobat, beat earnings estimates for its May quarter and lifted its full-year guidance.However, the company told Wall Street that it would grow a bit more slowly this year, even as it reported record sales.Investors sold ADBE on the news, pushing the stock to its lowest level in a year.The reason for Adobe’s slow growth projection is tied to a bet the company is making on how customers will use its artificial intelligence tools.JPMorgan reset its ADBE target because of it.Why JPMorgan cut its Adobe price target after a strong quarterJPMorgan lowered its price target on Adobe to $340 from $420 while keeping its Overweight rating, which means the firm still expects the stock to beat the market, MarketScreener reported.The cut came right after the second-quarter report, and the trigger was guidance.More Software Stocks:Adobe Q2 2026 Earnings Call: Updates on $ADBE outlookBank of America aggressively revamps Oracle stock price targetMichael Burry drops rare technical warning on Palantir stockAdobe lowered its forecast for organic annual recurring revenue growth, the steady subscription income Wall Street watches most closely, by about 2 percentage points from roughly 10.2%.JPMorgan read the move as Adobe ramping up near-term spending to secure a bigger payoff in the future.Which means the company is giving up subscription dollars right now to capture a larger long-term opportunity from AI.However, while the logic makes sense, it requires investors to be patient, but the market was already nervous about Adobe and was in no mood to wait.Adobe shares fell to a 52-week low after the company cut a key recurring revenue forecast.Smith Collection/Gado / Getty ImagesWhat Adobe actually reported in its second quarterThe second quarter looked strong.Adobe posted record revenue of $6.62 billion, up 13% from a year earlier, and non-GAAP earnings of $5.96 a share, both ahead of estimates, according to the company’s earnings release on Business Wire.Total annual recurring revenue reached $27.10 billion, and the slice tied to Adobe’s newest AI products more than tripled from a year ago to above $500 million, according to the SEC filing.Adobe’s second quarter at a glanceRecord revenue of $6.62 billion, up 13% year over year.Non-GAAP earnings of $5.96 a share, above the $5.82 consensus, TipRanks noted.Full-year revenue and profit targets raised.Organic recurring revenue growth guidance cut by about 2 percentage points.Why Adobe’s freemium AI bet rattled investorsAdobe is leaning into a freemium approach, which means offering users free access to additional AI features in hopes of converting them into paying customers later.Terms and Privacy PolicyPrivacy & Cookie SettingsMore Info