Adobe could be crawling its way out of the software stock abyss, after a buyback and an endorsement from Nvidia CEO Jensen Huang revived confidence in the digital media provider. Shares of Adobe, the owner of Photoshop and other tools, have been punished lately, plunging 40% below their May 2025 high and into a bear market. Like many of its software-as-a-service peers, Adobe has plummeted amid mounting fear that an industry dependent on per-user licensing for sales will be displaced by artificial intelligence agents. The iShares Expanded Tech-Software Sector ETF (IGV) remains 25% off its September high. But Adobe has rebounded more than 5% this month as investors add to names they expect were overly punished in the selloff. Adobe’s board on Tuesday showed its own belief in the business outlook and the stock, authorizing a new $25 billion share repurchase program. Elevated art Nvidia CEO Huang added to the bullish revival in his keynote address at the Adobe Summit 2026 Investor Session, saying “For 99.9% of creators in the world, this [agentic system] is going to elevate your art,” according to a JPMorgan note on the speech. Huang said the most innovative companies in the world are using applications on Adobe platforms. Those developments reinforce a view that Adobe will emerge as one of the winners of the “SaaSpocalypse,” according to Mark Murphy, analyst at JPMorgan. He has an overweight rating on the stock, with a $420 price target for December implying roughly 70% upside from Tuesday’s close of $247.18 per share. ADBE YTD mountain Adobe, YTD Adobe has characteristics most likely to weather ongoing AI disruption, namely durable growth rates, incremental AI monetization opportunities and seasoned management, Murphy wrote. Moreover, Adobe’s release of new products, including CX Enterprise Coworker, reflects a push to embed agentic AI in its tools to aid customers, a move that could expand the use of those tools. “In our view, the strategic bet Adobe is making is that as agents proliferate, the scarce asset becomes the contextual layer (AEP, brand truth, governed customer data, decisioning) that makes agent output reliable and onbrand, a layer Adobe has a multi-decade head start on and one that [large language model] vendors show no signs of successfully replicating at this point,” Murphy wrote on Wednesday. Adobe was almost 4% higher in midday trading Wednesday.
