Adobe Shares Plunge 13% Following Concerns Over AI Monetization and Outlook

Despite record revenue and better-than-expected earnings, investors are skeptical about Adobe's AI revenue growth and future guidance.

Adobe reported record quarterly revenue of $5.71 billion, a 10% year-over-year increase, exceeding analysts' expectations of $5.66 billion.
Adjusted earnings per share came in at $5.08, surpassing the forecasted $4.97, but future earnings guidance slightly underwhelmed analysts.
Annual recurring revenue (ARR) from AI reached $125 million in Q1, with Adobe projecting this figure to double by the end of the fiscal year, though it currently represents just 2% of total revenue.
Investors expressed concerns over Adobe's slower-than-expected AI monetization progress and competitive pressures from other companies in the generative AI space.
Adobe's stock fell 13% after the earnings release, marking its worst day of the year, as analysts called for clearer AI revenue strategies ahead of the company's annual conference next week.