Is Adobe's Stock Heading for $300?

Key Points The market has been significantly discounting Adobe's stock due to AI-related worries. The business has continued to grow at a solid rate, but demand may slow in the future. Adobe's stock currently offers investors a good margin of safety. 10 stocks we like better than Adobe › It's been a tough year for software stocks in 2026. Much of the focus has been on high-flying tech stocks such as Apple and Nvidia , which have hit record levels. The threat of artificial intelligence (AI), however, has been weighing significantly on many other types of businesses. Adobe (NASDAQ:ADBE) is perhaps the classic example. AI chatbots can create professional-looking images with ease. In the past, consumers might have needed to use Adobe Photoshop to make such advanced visuals. As a result of the AI threat, investors have been dumping Adobe's stock in droves. Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » Year-to-date, it's down 24%. But it's been rallying in recent months, as the business has continued to perform well, perhaps putting at least some of those fears to rest. Can its rally continue, and can it finish the year above $300? Image source: Getty Images. Is Adobe's stock undervalued? Shares of Adobe have been falling sharply due to AI-related concerns. Even though it's been rallying recently, it still trades at 15 times its trailing earnings, and that falls to a multiple of 10 when considering analyst expectations of future profits for the year ahead. Consider that by comparison, the average S&P 500 stock trades at 24 times trailing earnings and 21 times its future profits (based on estimates). Adobe is clearly a discounted stock, but there's also a valid rationale for this. If demand for its software diminishes over time, then its growth may evaporate. In its most recent quarter, which ended on May 29, the company's revenue rose by 11% when excluding the effects of foreign exchange. That may seem decent, but that doesn't mean the full impact of AI has been felt on the business just yet. Consumers, and especially professionals and businesses, may not simply cancel their subscriptions immediately and rely solely on AI chatbots for image generation. Transitions can take time, especially at the corporate level. There is risk with Adobe, even at its current price, and the key question is whether there's sufficient margin of safety priced into its valuation to make the stock worth buying today. Why I think Adobe's stock will finish the year above $300 Adobe may face greater AI-related headwinds, but it has also been incorporating AI into its products and services. Its sales aren't going to just fall off a cliff. And even if revenue growth stalled, paying around 15 times earnings for the tech stock may still not be unreasonable. I do think there are more reasons for the stock to rise than to fall at its current level. At a time when many tech stocks are overpriced due to AI, Adobe may be a more attractive option, which is why I think it could end up rising above $300 by the end of the year. Should you buy stock in Adobe right now? Before you buy stock in Adobe, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Adobe wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $421,997 !* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,413,876 !* Now, it’s worth noting Stock Advisor’s total average return is 978 % — a market-crushing outperformance compared to 213% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor , and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of September 7, 2026. David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Adobe, Apple, and Nvidia. The Motley Fool recommends the following options: long January 2028 $330 calls on Adobe and short January 2028 $340 calls on Adobe. The Motley Fool has a disclosure policy .

The market has been significantly discounting Adobe's stock due to AI-related worries.

The business has continued to grow at a solid rate, but demand may slow in the future.

Adobe's stock currently offers investors a good margin of safety.

It's been a tough year for software stocks in 2026. Much of the focus has been on high-flying tech stocks such as Apple and Nvidia , which have hit record levels. The threat of artificial intelligence (AI), however, has been weighing significantly on many other types of businesses.

Adobe (NASDAQ:ADBE) is perhaps the classic example. AI chatbots can create professional-looking images with ease. In the past, consumers might have needed to use Adobe Photoshop to make such advanced visuals. As a result of the AI threat, investors have been dumping Adobe's stock in droves.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

Year-to-date, it's down 24%. But it's been rallying in recent months, as the business has continued to perform well, perhaps putting at least some of those fears to rest. Can its rally continue, and can it finish the year above $300?