Adobe downgraded to Sell due to risk of 'hard reset': Citi

Citi downgraded Adobe to Sell, cutting its price target to $207. The bank anticipates a 'hard reset' due to leadership changes and a strategic shift towards AI-driven user growth, which may pressure ARR growth and margins. Citi lowered its fiscal 2027 ARR growth estimate to 5.3% and non-GAAP gross margin by 70 basis points, citing AI inference costs and competitive pressures.

Citi downgraded Adobe (ADBE) to sell, lowering its price target to $207 from $250, citing potential downside to growth estimates. The firm expects strategic changes under new CEO Anil Chakravarthy to impact short-term growth and sees risks from AI competition and macroeconomic uncertainties. Citi projects Adobe's ARR growth to be below consensus estimates through 2028. Shares have fallen 30% year to date.

Citi downgraded Adobe (ADBE) to Sell, citing risks to growth estimates through 2027 due to leadership changes and competitive pressures. The bank cut its price target to $207 from $250, anticipating a shift in strategy that may weigh on near-term growth. Adobe shares fell over 2% in premarket trading.

U.S. Secretary of State Marco Rubio stated that recent changes to U.S. work visa rules are global and not targeted at India. The U.S. Labor Department suspended six major IT outsourcing firms, including Infosys, Tata Consultancy Services, and Wipro, from the PERM program. Rubio emphasized the measures aim to protect American workers and address fraud in business-related immigration programs. India has expressed concerns, stating the measures do not support shared objectives.

ServiceNow (NOW) and Fortinet (FTNT) missed earnings expectations, leading to declines in their shares and other SaaS stocks. NOW reported adjusted earnings of $1.00, below the $1.17 estimate, while FTNT's product revenue grew 37% YoY, down from 52% in Q2. Alphabet's (GOOGL) weaker-than-expected results added to the pressure, with GOOGL stock dropping 10%. Key SaaS stocks like PANW, CRM, INTU, and ADBE also fell in sympathy.

JPMorgan (JPM), Coca-Cola (KO), Dell (DELL), AMD (AMD), Adobe (ADBE), Applied Materials (AMAT), and Sandisk (SNDK) objected to OKX and ICE's plan to offer tokenized shares. 33 of 62 notified companies have objected. OKXICE aims to trade tokenized US stocks on Uniswap v4 liquidity pools, settling in stablecoins like USDC, under SEC's Innovation Exemption.