Adobe39;s Q4 revenue forecast misses analyst expectations
AI investments face competition from startups such as Stability AI and Midjourney
JP Morgan notes Adobe39;s healthy subscription signups despite weak forecast

Sept 13 Reuters Shares of Adobe fell nearly 10 on Friday, after the Photoshop maker39;s disappointing quarterly earnings forecast sparked fears that returns from its push towards artificial intelligence design will take longer to materialize.

As one of the world39;s largest software companies, Adobe has been heavily investing in AI image and video generation to maintain its top spot in the design software industry amid rising competition from wellfunded startups such as Stability AI and Midjourney.

The company on Thursday projected fourthquarter revenue between 5.50 billion and 5.55 billion, while analysts polled by LSEG expected 5.61 billion.

Excluding items, quarterly profit is expected to be between 4.63 and 4.68 per share, compared with estimates of 4.67 per share.

If current losses hold, Adobe is set to lose more than 25 billion in market value.

The company39;s shares have fallen nearly 2 this year after rising over 77 in 2023.

Despite guiding fourthquarter revenue below estimates, Adobe said it expects to surpass its expectations for annual net new annual recurring revenue NNARR, signaling that Adobe39;s subscription sign ups remain healthy.

Adobe remains on track to deliver Creative Cloud NNARR yearonyear growth in Q4 and is one of the rare…