Adobe Stock: Is ADBE Underperforming the Technology Sector?

Adobe Inc. (ADBE) is a leading software company specializing in digital media, creative tools, and marketing solutions. Headquartered in San Jose, California, it develops applications for design, document management, and customer experience, serving creators, businesses, and enterprises worldwide through direct sales, partners, and its website. The company has a market capitalization of $101.26 billion, which classifies it as a “large-cap” stock.

The stock had reached a 52-week low of $244.28 on Feb. 24 but is up 4.5% from that level, amid significant investor concern about artificial intelligence (AI) disruption. The stock is down 19.9% over the past three months, while the broader State Street Technology Select Sector SPDR ETF(XLK) has gained marginally over the same period. Therefore, Adobe has underperformed its sector over the past three months.

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Over the past 52 weeks, Adobe’s stock has dropped 42.6%, while it is down 27.1% year-to-date (YTD). On the other hand, the Technology Select Sector ETF is up 21.2% over the past 52 weeks and is only down 2.5% YTD. Adobe’s shares have traded consistently below their 200-day moving average over the past year and have been below their 50-day moving average since early January.

Adobe’s stock dropped 4.6% intraday on Feb. 23 after its competitor Canva announced it had acquired two startups, Cavalry and MangoAI. This seems to be a bid to challenge Adobe, as Cavalry has been receiving attention among social media designers as an alternative to Adobe’s After Effects. On the other hand, despite fears of AI disruption, Adobe has a chance to stage a comeback, as it continues to invest in key areas.

Moreover, the company’s fundamentals remain robust. In the fourth quarter of fiscal 2025 (quarter ended Nov. 28, 2025), Adobe’s revenue grew by 10.5% year-over-year (YOY) to a record $6.19 billion, surpassing analysts’ expectations as well. For the first quarter of fiscal 2026 (to be reported on Mar. 12, after the market closes), analysts expect Adobe’s profit to grow by 13.3% YOY to $4.85 per diluted share.

We compare Adobe’s performance with that of another software application stock, Autodesk, Inc. (ADSK), which has declined 22.6% over the past 52 weeks and 25.4% YTD. Therefore, Adobe has been the clear underperformer over the past 52 weeks.