Adobe (ADBE.US) hit by strongest bearish wave in history: AI disruption fears intensify, number of sell ratings hits record high.

Title context: Adobe (ADBE.US) hit by strongest bearish wave in history: AI disruption fears intensify, number of sell ratings hits record high. Text: As the market grows increasingly worried that Adobe (ADBE.US) will struggle to remain competitive in the AI era, analysts' views on this creative software giant have dropped to a historic low. This week, two institutions downgraded Adobe, joining a growing ranks of doubters. They worry that AI companies' products will erode demand for software such as Photoshop and weaken Adobe's long-term growth potential. Analysts turn collectively: number of sell ratings hits a record high The first downgrade this week came from Wells Fargo Securities. On Monday, the institution cut Adobe's rating by two notches, from "Overweight" to "Underweight," and lowered its 12-month target price from $270 to $225. This brought the number of sell ratings on Adobe to 7, the highest in history, compared with zero in mid-2025. Wells Fargo analyst Michael Turrin wrote: "More obvious cracks in Adobe's growth trajectory are beginning to appear." He was referring to Adobe's third-quarter results released last month, calling them "fairly lackluster." He also said that, given recent management comments about delaying price increases for core creative products, Adobe's ability to meet its full-year targets looks "difficult." On Tuesday, HSBC analyst Stephen Bersey downgraded Adobe from "Buy" to "Hold" and cut his target price from $310 to $267, calling Adobe a "realistic candidate for AI-led disruption." So far this year, analysts have downgraded Adobe's stock at least 15 times, including the two downgrades this week. As a result, Adobe's consensus recommendation indicatora proxy that combines the proportions of buy, hold, and sell ratingshas fallen to 3.16 on a 5-point scale, a record low. By comparison, the average consensus rating for constituents of the S&P 500 Software Index is 4.65, indicating noticeably stronger bullish sentiment. Stock plunges for a third consecutive year, seen as a typical case of AI disruption Concerns about AI disruption have been a central theme for software investors this year. In early 2026, the software sector plunged as AI-native companies such as OpenAI and Anthropic continued to launch new products. As investors concluded that some software is difficult to replace, sentiment in the sector has largely recovered, but Adobe remains a clear exception. So far this year, Adobe's stock has fallen nearly 30%, while the iShares Expanded Tech-Software Sector ETF has risen 3.7% over the same period. The ETF is widely regarded as a proxy for the software sector. Adobe's stock may fall by more than 20% for a third consecutive year, and this prolonged selloff reflects the market's view of it as a typical case of AI disruption. Investors worry that users may abandon Photoshop subscriptions and turn to tools from companies such as OpenAI or Anthropic to generate images through prompts. Although Adobe also offers its own AI features, the market worries that AI competition will suppress its pricing power and drag down profit margins. This concern is at the core of HSBC's downgrade. Bersey believes the competition comes from "Adobe clone software based on AI prompts." Citing media reports, he wrote that a company called ArtCraft offers free products of the same type, including "versions of Photoshop, Illustrator, Premiere, Lightroom, Acrobat, After Effects, and InDesign." Bersey wrote that this kind of competition "creates negative news risk for Adobe," although he believes such services also pose risks to users. Overall, Adobe is facing multiple pressures from analyst sentiment, stock performance, and AI competition concerns. The market is focused on whether this creative software giant can defend the moat around its core products in the AI era.