Adobe’s dominance in graphic design software is under threat from generative AI, which is being adopted by competitors like Figma and Canva. Analysts are growing worried that the company’s ability to monetize its own AI integrations is uncertain. Morgan Stanley has cut its price target for Adobe, warning that the company needs to deliver a significant return on investment in AI technology.
The tech giant’s stock has declined 18% this year, despite beating earnings estimates. Analysts are concerned about the declining annual recurring revenue and whether Adobe’s AI push will be enough to boost excitement. The “AI bubble” is also starting to burst, with investors questioning when they’ll see a return on investment in generative AI.
Adobe faces challenges from its costly subscription model, which may be deterring new customers. Competitors are offering cheaper or free alternatives, and users are becoming increasingly skeptical about the value of AI-powered services. The company’s own use of AI is also coming under scrutiny, with some criticizing the flooding of its image archive with AI-generated content.
As generative AI continues to evolve, Adobe must adapt to stay ahead in a rapidly changing market. But for now, the company’s ability to convince users that it remains an edge over competitors is uncertain.
Source: https://futurism.com/future-society/morgan-stanley-warns-ai-kill-adobe