Adobe shares surge as earnings beat and HSBC upgrades rating despite AI concerns

Adobe’s stock rallied this week with a double‑digit gain after the company posted its fiscal‑2026 second‑quarter results that exceeded expectations. Revenue reached $6.62 billion, up 12.7% year‑on‑year, and adjusted earnings per share were $5.96, a 7.8% increase. Annual recurring revenue grew 50% quarter‑on‑quarter and gross margins remained stable despite higher AI‑related costs. Although the shares slipped another 3.7% after the results were released, the overall weekly gain was close to 10%.

HSBC analyst Stephen Bersey upgraded Adobe to “buy” from “hold” and raised the target price to $308 from $282, arguing that the market is overstating the threat from AI competition. He cited Adobe’s strong revenue growth, high customer lock‑in from its creative‑cloud ecosystem, and ongoing AI investments as fundamentals that outweigh perceived risks. The stock closed at $210.98, up 2.9% on the day, reflecting renewed investor confidence.