On the most recent trading session, Adobe shares fell by 2.62%, a drop that outpaced the broader technology index’s modest retreat of 1.7%. This decline follows a cumulative 8.8% slide over the past three months, during which the wider Computer and Technology sector returned 3.9%. Investors have cited an uncertain macroeconomic backdrop and renewed concerns about an AI-driven market bubble as primary catalysts for the underperformance.

Despite the share-price weakness, Adobe reported another quarter of double-digit year-over-year revenue growth in its fiscal third quarter, driven by strength in digital media subscriptions and enterprise licensing. The company has repurchased nearly $4.5 billion of stock over the past 12 months, helping to lift its diluted earnings-per-share by an estimated 12% year-over-year. Adobe’s shares now trade at roughly 14 times consensus forward earnings, a significant discount to the historical average multiple of 20.

Investor concerns about generative AI competition intensified after Oppenheimer and Jefferies issued recent downgrades, citing decelerating top-line momentum during the transition to AI-enhanced creative tools. Since reaching an all-time high late in 2021, Adobe’s share price has tumbled by approximately 55%, and the stock currently trades at 18.2 times trailing price-to-earnings. Critics argue that while Adobe’s Firefly AI model shows promise, new entrants may erode the company’s longstanding moat in imaging and video software.