Adobe Stock Drops on Disappointing Guidance. Wasn't Artificial Intelligence (AI) Supposed to Boost Its Business?

Adobe's stock price fell sharply after the company issued disappointing guidance for the current quarter.

The company's shares fell by more than 10% in after-hours trading on Thursday after Adobe said it expects revenue to be between $4.34 billion and $4.4 billion in the current quarter, below analysts' expectations of $4.5 billion.

Adobe also said it expects earnings per share to be between $3.35 and $3.45, below analysts' expectations of $3.55.

The disappointing guidance comes as a surprise to many analysts, who had expected Adobe to benefit from the growing popularity of artificial intelligence (AI).

AI is increasingly being used in a variety of applications, including image recognition, natural language processing, and predictive analytics.

Adobe has been investing heavily in AI in recent years, and the company has developed a number of AI-powered products, including Adobe Sensei.

However, it appears that Adobe's AI investments have not yet had a material impact on the company's financial performance.

This is likely due to the fact that AI is still a relatively new technology, and it is still being developed.

It is also possible that Adobe is facing competition from other companies that are also investing heavily in AI.

Despite the disappointing guidance, Adobe remains a strong company with a loyal customer base.

The company's products are used by millions of people around the world, and Adobe is well-positioned to benefit from the growing popularity of AI.

However, it is clear that Adobe needs to do more to demonstrate the value of its AI investments to investors.

The company may need to consider increasing its marketing spend on AI, or it may need to develop more AI-powered products that are directly tied to its core businesses.

Until Adobe can do a better job of demonstrating the value of its AI investments, it is likely that the company's stock price will continue to lag behind its peers.