Investment firm Redburn has reaffirmed its Sell rating on Adobe Inc., (ADBE) maintaining a $280 price target and issuing a stark warning that the company’s core creative software business faces an imminent threat from rapidly advancing generative AI. The firm’s analysis suggests that new, accessible AI tools are poised to disrupt the market long dominated by Adobe’s flagship product, Photoshop.
According to Redburn, recent testing of Google’s previewed “Nano Banana” image editing model indicates it possesses the capability to significantly erode Photoshop’s market share. This external pressure compounds existing investor concerns regarding Adobe’s slowing subscription growth and its apparent weakening pricing power in the creative software space.
The report also highlights Runway’s “Aleph” as another example of the breakneck speed at which generative AI for visual media is evolving, noting that the emergence of fully editable, high-quality outputs could be a reality within mere months.
The central argument from the firm is that this accelerated pace of innovation raises serious doubts about the long-term strength of Adobe’s competitive moat. While Adobe has launched its own Firefly AI suite, Redburn believes the sheer velocity and accessibility of new, specialized competitors could overwhelm Adobe’s ability to adapt, thereby reinforcing its negative stance on the stock’s future performance.
