Tom Lee, Chairman of Bitmine Immersion and Co-Founder & Head of Research at Fundstrat, says that while the U.S. jobs report was better than expected, job losses might follow due to the recent tech sell-off. He also expects the new Federal Reserve under Trump nominee Kevin Warsh to be more dovish.
If we look into the rear-view mirror, there is no question that Adobe has been operating a world-class SaaS business, but we all know that markets are forward-looking in nature. Adobe's share price reached an all-time high of $699.54 in November 2021, meaning that today's low of ~$255.00 represent a drawdown of more than 60%. I do not want to minimize the challenges facing Adobe, but I expect its customer base to remain more sticky than what is currently priced in by the market.
Adobe Systems (ADBE) reached $257.16 at the closing of the latest trading day, reflecting a -2.84% change compared to its last close.
My methodology blends forward P/E ratios, company size, and default risk to rank Nasdaq 100 constituents by valuation. TSLA, INTC, AXON, PLTR, and CRWD are the most overvalued; PYPL, CTSH, ADBE, KHC, and PAYX are the most undervalued. Despite a $2.3trn market cap for the top 5 overvalued stocks, analysts expect higher earnings growth from the undervalued group.
Adobe remains a 'Buy' despite market skepticism, with shares down 30% but fundamentals intact and double-digit revenue growth persisting. ADBE trades at a deep-value multiple—12.6x FY26 P/E—despite guiding for 9% revenue and 11% EPS growth in FY26 and strong ARR expansion. Fears of AI-driven disruption are overblown; Adobe's ARR and RPO both grew double digits, with large enterprise deals and committed backlog supporting long-term stability.
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Adobe Inc. shares are down 40% in the last year and are now trading at a forward multiple of just 11x earnings. ADBE stock valuation is well below both the sector average and its own historical average in the mid-30x range. The underperformance comes at a time when investors are pessimistic yet uncertain about the impact of AI on individual business lines.
The severity of the pullback in software stocks in recent days, driven by fears of advances in artificial intelligence disrupting the industry, has created opportunities for investors to position for a rebound in higher-quality stocks, strategists at JP Morgan said.
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Adobe, Goldman Sachs and Entergy are standing out in February as earnings acceleration signals growing momentum before stock prices react.
Investors can take a breather and assess whether there are opportunities to buy some beaten-down software stocks, after what some analysts believe was “indiscriminate” selling.
Financial-data stocks were big losers as investors worried about the threat AI poses to tools for modeling and analysis.