Adobe Stock Looks Like a Huge AI Bargain After a Nosedive. Should You Buy?

Adobe (NASDAQ:ADBE | ADBE Price Prediction) stock looks on track to revisit multi-year lows following the latest AI-driven scare that’s worked its way through the software scene. Undoubtedly, the software stocks, especially Adobe, have been gravitating lower for well over a year now, but something certainly feels different about the latest shocker, which likely has something to do with Anthropic’s AI agent Cowork, which, believe it or not, was made primarily by an AI model Claude.

And unlike most other “buzzy” agents that have been touted in the past year, Cowork actually gives a nice preview of what’s to come. Undoubtedly, agentic AI made some ripples last year, but Claude Cowork seems to have generated a massive tidal wave that could change the way investors think about agents. The Cowork headlines really do beg the question if agents really are going to change the working world for good.

While recent Anthropic studies seem point to AI augmenting workers rather than replacing them, one has to wonder what the longer-term fate of software will be as agentic AI advances and flexes its muscles in a way to change how investors think about the SaaS companies that fared so incredibly well through the 2010s. Of course, the software companies, including Adobe, aren’t just going to sit around waiting to be disrupted. They’ve got an AI agent to respond, but the big question is whether it’s enough to fight agentic rivals with one’s own AI agents.

Of course, there’s the data advantage that firms like Adobe possess. But whether that’s enough to keep up-and-coming rivals, some of which can code competing products, at bay remains the multi-trillion-dollar question. For now, if you’re a believer in AI innovation, software, even the ones effectively embracing the rise of AI, seem to be risky.

The Claude impact bites software hard

With Adobe shares having taken a nearly 57% haircut, though, the bull case for the stock is how low is too low? Even a challenged stock facing headwinds can be a good buy if the price is low enough. And at 17.7 times trailing price-to-earnings (P/E), I do think Adobe stock has fallen below that line in the sand. It’s not only a great deal in tech; it’s cheap enough to be a classic value stock. 

In the face of Claude’s Cowork impact, I do think much of the recent selling momentum is fear-based rather than fundamental-driven. Perhaps it’s growing difficult to value a company like Adobe, which has yet to show that its own AI can re-accelerate growth to where it needs to be to warrant a multiple far north of 30 times P/E. The wait-and-see approach also seems quite risky since the agentic AI news events are going to keep flowing in. Perhaps Claude Cowork is just the appetizer before the real shockers to come. Whether OpenAI or DeepSeek delivers the next shocker remains to be seen.

Regardless, Adobe and other software firms need a quarter to prove that a growth multiple is justified. Otherwise, Adobe may very well deserve to trade with a P/E in the teens, especially if the disruptive wave of new AI-native apps and agents erodes the software moats further. That’s a real risk. And if Adobe can’t deliver a shocker with Firefly AI in the coming quarter, it might be better to proceed cautiously with value that might not be grounded in next-level growth.

Is Adobe a real value or a trap?

Of course, Adobe feels like far more than a value trap these days, but with the pace of analyst downgrades and growing uncertainty about whether Firefly AI can excite again, I’m more inclined to be a cautious skeptic and a modest nibbler on weakness, rather than a table-pounder. The full extent of the agentic AI implications may not yet be fully understood, and if AI is moving faster than investors are comfortable with, perhaps Adobe stock becomes more of a hold than a buy.

Beyond the low P/E argument, I do think that Adobe’s AI integrations are going quite smoothly. It’s a good, polished product, but will prosumers stay subscribed in an era where agentic AI might be driving down the perceived value of software? I’m really not sure. I’d rather wait for evidence of increased subscriber stickiness first.

Personally, I think Adobe is a high-upside stock that would reward investors who believe the agentic AI disruption is overblown right now. There’s certainly a strong case for software, given that Claude Code and Cowork are entering a period of elevated hype. Given how difficult it is to thrive in creative generative AI solutions, though, I’m a bit worried about the year ahead for Adobe, especially given how fast the shares have become a falling knife.