Adobe delivers an upbeat outlook despite irritation over tech giant's AI business potential

Investors, who have been looking for more convincing evidence that Adobe Inc. can prosper in the age of artificial intelligence, were unimpressed despite the company's optimistic annual projection.

According to a statement released by the corporation on Wednesday, revenue for the fiscal year ending in November 2026 will be between $25.9 billion and $26.1 billion. Some analysts had projected revenues of above $26.4 billion, but the midpoint of that range exceeded the average projection.

According to Chief Executive Officer Shantanu Narayen, Adobe's performance for the most recent fiscal year exceeded forecasts, demonstrating the company's "growing importance in the global AI ecosystem and the rapid adoption of our AI-driven tools."

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Nevertheless, some of the artificial intelligence methods that the corporation outlined in its report three months ago have not been updated. It reported in September that sales of AI-first goods hit $250 million and its AI-influenced yearly recurring income exceeded $5 billion.

After closing at $343.13, the shares whipsawed during prolonged trading. This year, the stock has lost almost one-fifth of its value; this decrease is similar to that of other established application software companies, such as Salesforce Inc.

Investors have been worried that Adobe's business will be disrupted by generative artificial intelligence. Many other well-known tools, like Google's video-generating model Veo, are created by someone else, even if AI capabilities in programs like Photoshop have previously been used tens of billions of times.

Adobe stated earlier on Wednesday that Photoshop and Acrobat would be incorporated into OpenAI's ChatGPT, with some functionalities available to chatbot users for free, in an attempt to make sure its services are viewed by a wider audience.

Sales for the fourth quarter exceeded the forecast of $6.11 billion, rising 10% to $6.19 billion. During the period that concluded on November 28, adjusted earnings increased to $5.50 per share. That contrasted with the $5.39 forecast.

With certain factors excluded, profit in the upcoming year will be between $23.30 and $23.50 per share. $23.37 was the analysts' expectation.