AI disrupts creative software giant! After a steep drop of nearly 60% in two years, Adobe (ADBE.US) announces a $250 billion share buyback to stabilize stock prices.

After investors worried that artificial intelligence (AI) could disrupt business models and drag down stock prices for more than two years, creative software giant Adobe (ADBE.US) announced it will repurchase up to $25 billion worth of company stock in the future. The company's Chief Financial Officer Dan Durn stated in a declaration on Tuesday that this new repurchase authorization will last until April 2030, "showing our confidence in strong cash flow and the ability to create long-term value for investors." This repurchase authorization will replace another $25 billion stock repurchase program announced by Adobe in March 2024, which is close to completion. Boosted by this news, Adobe's U.S. stock rose nearly 2% after hours on Tuesday. Data shows that Adobe's stock price fell around 25% in 2024 and 21% in 2025, and has dropped over 29% year to date. Adobe was one of the software stocks that had been sold off earlier due to fears of "AI disrupting everything". This continuous sell-off stemmed from market concerns about AI-native companies (such as Anthropic, OpenAI) disrupting traditional software business models investors worry that AI will permanently weaken enterprise software pricing power, revenue growth, and profit margins. For Adobe, generative AI allows users to create visual media content more easily without having to use Adobe's expensive software that has long been the industry standard for creative professionals. OpenAI's Sora can generate high-definition videos directly from text descriptions, Midjourney can create diverse art illustrations in seconds, Canva encapsulates professional design capabilities into simple template systems, and Nano Banana pushes AI's image editing capabilities to new heights. In addition to pure AI tools, Adobe also faces challenges from traditional competitors' AI upgrades. Canva has continuously strengthened its Magic Studio series of AI functions in 2025, including Magic Design, Magic Edit, Magic Write, etc., further lowering the barriers on its already user-friendly platform. Figma has eaten away at Adobe's market from another angle the company introduced four AI-driven new tools, Sites, Make, Buzz, and Draw, at last year's Config conference, directly competing with Adobe's core product lines in website building, code generation, marketing content, and vector graphic design. However, Adobe itself has been actively embracing the AI wave. Adobe's AI strategy core is Firefly, a series of generative AI models developed in-house and launched in 2023, continuously iterated and upgraded since then. According to Adobe's official data, as of April 2025, assets generated by Firefly have surpassed 22 billion, which is among the fastest-growing adoption curves in generative AI history. Of particular note is the Firefly Foundry service. This custom AI model service for enterprise clients allows brands to train exclusive generative AI models based on their own materials, ensuring that the output content is in line with the brand tone. Adobe claims this will help marketing teams increase asset variant production efficiency by 70% to 80%, while reducing review and repair time by 75%. However, Adobe's AI efforts have not yet translated into tangible revenue. A report by Jefferies Financial Group Inc. earlier this year downgraded Adobe's rating, pointing out that "AI contributions have not yet been reflected in revenue trends." An investment manager mentioned that although Adobe has fully integrated AI functions into its products, what investors see is users completing tasks faster, not more users or higher subscription revenue. The deep paradox Adobe faces is that the more powerful AI becomes, the lower the value of each unit of work; the more common AI tools become, the smaller the premium for professional skills. Adobe's business model for the past forty years has been built on the premise of "rare professional capabilities," and AI is rapidly eroding this scarcity. Faced with deep doubts in the market about whether Adobe can continue to lead in the AI era, the company's CEO Shantanu Narayen announced last month that he would step down from his position after serving as CEO for 18 years, but will stay on until his successor is determined and will continue to serve as chairman of the board. Market research firm Emarketer analyst Grace Harmon stated that the CEO transition has raised questions about the company's strategic continuity, capital allocation focus, and pace of innovation, "Investors may focus on whether the new leadership can balance strict execution of established business with aggressive investment in AI, especially as competition intensifies in the creative software and enterprise AI domains." To address market competition pressure, Adobe on Monday introduced a set of AI tools designed to help enterprise customers automate and personalize their digital marketing functions. This new suite, called CX Enterprise, uses AI agents to help businesses manage interactions with customers. The system is an end-to-end agent-based AI platform that can help businesses manage the entire customer lifecycle, including acquisition, engagement, conversion, and retention. Built on the Adobe Experience Platform, the platform aggregates customer data from multiple sources to provide real-time insights and cross-channel interactions. Adobe also launched the CX Enterprise Coworker feature to coordinate tasks between multiple AI agents and translate defined business goals into a series of specific actions. To ensure the new system runs on different platforms, Adobe is collaborating with several tech companies, including Amazon.com, Inc., Microsoft Corporation, Anthropic, OpenAI, and NVIDIA Corporation. Additionally, Adobe has expanded its partnerships with AI platforms such as AWS, Alphabet Inc. Class C Cloud, IBM, allowing businesses to extend agent-driven workflows on any interface. Global leading advertising companies like Omnicom, WPP, as well as system integrators like Accenture Plc Class A, Deloitte Digital, are leveraging Adobe's AI capabilities to provide customized services.