Adobe (ADBE) has underperformed in stock value over the last several months, despite a boom in the artificial intelligence (AI) industry. On September 25, Adobe Inc. CEO Shantanu Narayen sold 25,000 shares at $521.58 per share, reducing his ownership by 7% to 357,967 shares. The stock has tumbled 5% since that sale, and the company continues to fumble a successful catapult off the current AI wave.
The third quarter ended with a bang, with all the major indices near record highs. Investors shunned macroeconomic instability, soaring geopolitical tensions, and U.S. election uncertainty to boom certain stock values. However, Adobe failed to be one of these booming stocks, falling 11% in the last three months.
Adobe Continues To Struggle Despite 2024 Product Performance
While the company has enjoyed tremendous success in offering products, services, and solutions that enable individuals, teams, and enterprises to create, publish, and promote content, Adobe finds itself in a tough position. The stock is down by about 14.02% for the year, making it one of the worst-performing blue chip stocks in 2024. Investors worry that despite the success of the company’s successful applications, the long-term outlook of ADBE isn’t as positive.
Adobe’s Digital Media division, which includes its flagship Photoshop and Illustrator, accounts for almost three-quarters of its total revenue. The remainder is derived from its enterprise clients’ Digital Experience services. Over the previous two fiscal years, both business divisions struggled with slower sales growth.
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Despite that struggle, Adobe (ADBE) delivered solid third-quarter results, delivering $5.41 billion in revenue, an 11% increase from the previous year. Adobe’s earnings-per-share (EPS) totaled $3.76 as opposed to a range of $3.45 to $3.50. While Wall Street was expecting roughly $5.61 billion, the company projected between $5.5 billion and $5.55 billion for the fourth quarter.
