Should You Buy, Sell or Hold Adobe Stock Before Q2 Earnings?
AdobeADBE is set to report its second-quarter fiscal 2026 results on June 11.
For the second quarter of fiscal 2026, Adobe expects total revenues between $6.43 billion and $6.48 billion. The company expects fiscal second-quarter non-GAAP earnings per share between $5.85 and $5.90.
The Zacks Consensus Estimate for revenues is pegged at $6.46 billion, suggesting growth of 9.94% from the year-ago quarter’s reported figure. The consensus mark for earnings has been unchanged at $5.83 per share over the past 30 days, indicating 15.22% growth from the figure reported in the year-ago quarter.
ADBE’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 2.46%.
Let us see how things have shaped up for ADBE stock prior to this announcement.
Factors to Note Prior to ADBE’s Q2 Earnings
Adobe’s fiscal second quarter is expected to have benefited from accelerating adoption and integration of AI-driven products across its portfolio.
Adobe’s leadership has emphasized that its AI-first offerings, such as Firefly, Acrobat AI Assistant and GenStudio, are experiencing rapid growth across both individual and enterprise segments. In the first quarter of fiscal 2026, ARR from these AI-first applications more than tripled year over year, and generative credit consumption grew over 45% quarter over quarter. This momentum is expected to have continued, as more users and organizations embed AI into their creative and productivity workflows, driving both usage and monetization in the to-be-reported quarter.
Enterprise demand for content automation and customer experience orchestration is also expected to have driven growth in the to-be-reported quarter. Adobe’s solutions, such as Firefly Enterprise and GenStudio, are enabling large brands to scale content production and personalize customer experiences at unprecedented levels. In the first quarter of fiscal 2026, Firefly Enterprise’s new customer acquisition grew 50% year over year, and Adobe Experience Platform and related apps saw over 30% year-over-year subscription revenue growth.
In the second quarter of fiscal 2026, Adobe expects Business Professionals and Consumers’ subscription revenues between $1.80 billion and $1.82 billion. Creative and Marketing Professionals’ subscription revenues are expected to be between $4.41 billion and $4.44 billion.
However, Adobe faces stiff competition in the AI and Generative AI (GenAI) space from the likes of MicrosoftMSFT-backed OpenAI, AlphabetGOOGL, Salesforce, Midjourney and Canva. This, along with a challenging macroeconomic environment, has been a headwind for Adobe’s prospects.
ADBE Shares Underperform Sector, Industry
In the year-to-date period, Adobe shares have lost 30%, underperforming the broader Zacks Computer and Technology sector’s return of 17.2% and the Zacks Computer Software industry’s decline of 13.8%.
The company’s shares have also underperformed its peers, which include Microsoft and Alphabet. While Microsoft shares have plunged 14.9%, Alphabet shares have appreciated 16.1% over the same time frame.
ADBE Stock Performance
Image Source: Zacks Investment Research
ADBE shares are cheap, with a forward 12-month Price/Sales of 3.63X compared with the Computer & Technology sector’s 6.59X, Microsoft’s 8.08X and Alphabet’s 9.55X. ADBE has a Value Score of B.
ADBE Valuation
Image Source: Zacks Investment Research
ADBE Benefits From Expanding Partnerships
Adobe’s strategic partnerships and ecosystem expansion will further benefit Adobe in the second quarter. The company is integrating its capabilities with leading AI platforms like Anthropic, NVIDIA, DICK’S Sporting GoodsDKS and OpenAI, as well as collaborating with global consulting and advertising firms.
In April 2026, Adobe and DICK’S Sporting Goods announced a strategic partnership to enhance customer experiences through AI-powered personalization. DICK’S Sporting Goods will leverage Adobe’s enterprise solutions, including Adobe Experience Platform, Real-Time CDP, Journey Optimizer, Brand Concierge and GenStudio, to deliver tailored recommendations, training guidance and seamless interactions across digital and in-store channels.
The partnership will introduce AI-powered “digital coaches” on the DICK’S mobile app, helping customers with product discovery, training tips and personalized support. By combining Adobe’s AI and customer experience technologies with DICK’S sports expertise, the companies aim to create more engaging, data-driven and personalized athlete experiences at scale.
Conclusion
Adobe’s prospects benefit from strong demand for its creative products. However, Adobe is suffering from increasing competition in the GenAI space and AI-driven disruptions. Lack of monetization is a headwind for Adobe amid challenging macroeconomic conditions.
Adobe currently has a Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a favorable time to start accumulating the stock.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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