Adobe (ADBE) stock trades at 12.9 times earnings, versus 21.9 times for the S&P 500, and the company no longer highlights AI-influenced recurring revenue as before, instead pointing to revenue from products sold as AI-first. On the fiscal Q4 2025 call, executives said AI-influenced recurring revenue, now including AI-first products, exceeded one-third of the business, while AI-first products made up more than 2% of the $27.5 billion in total recurring revenue in fiscal Q3 2026 and grew more than 150% year over year. Total recurring revenue rose 11.2%, contracted future revenue grew 8%, and monthly users of free creative products passed 100 million, up more than 70%. Wells Fargo downgraded the stock on October 12, citing worsening organic growth, executive instability and a loss of pricing power. The key figure to watch in fiscal Q4 is whether total recurring revenue reaches about $28.3 billion, management's target of 10.2% growth on the $25.66 billion it started fiscal 2026 with.
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