In November I wrote about why I believe Adobe (NASDAQ:ADBE) stock was an excellent value heading into the end of the year. However, so far in 2026, the share price is down 23%. Some say that artificial intelligence will disrupt business operations. Here’s why I simply disagree.

Analyzing the news

Let’s first look at the history of AI disruption, which is currently gaining momentum. Some investors fear that generative AI threatens Adobe’s core business (innovative software). New AI tools from competitors (like Anthropic and Canva) make innovative workflows easier and cheaper. There is concern that this could reduce demand for older subscription Adobe products such as Photoshop. If this happens, it will have a sedate negative impact on the company.

Another aspect of AI that is currently hurting the company is its ability to monetize innovation. Adobe is working tough on its own AI innovations that it believes could boost profitability in the future. However, some are concerned about the amount of capital expenditure being committed here, given the narrow results so far.

Beating the drum

Don’t get me wrong, there are risks in the future. The decline in the share price shows that these factors should be taken seriously. However, the despondent view of the company’s long-term prospects is, in my opinion, wrong.

The latest quarterly results in December showed record revenue of $6.19 billion, up 10% from the same period last year. If the company had actually been overtaken by competitors and cheaper alternatives, it would not have recorded such record results.

The CEO commented on this “By advancing our innovative generative and agent platforms and expanding our customer base, we are excited to achieve double-digit ARR growth throughout 2026.” So it’s clear that our focus is on developing AI capabilities that will lend a hand not only retain but also enhance customer acquisition. Of course, time will tell whether the expected revenue growth materializes this year, but if it does, I have a tough time imagining how the company’s stock won’t rise on the good news.

Finally, the current price-to-earnings ratio is 15.4. For comparison, the average coefficient for Nasdaq is 23.71. Based on this, I believe that a lot of the bad news has already been factored into the company’s stock. It can be seen as undervalued compared to the technology index. So even if I’m wrong in my assessment, given the valuation, it’s tough to imagine how the share price could drop significantly as a result.

Overall, Adobe is not a low-risk stock for investors. He clearly has some tough issues to overcome this year. However, I think the pessimism surrounding the company lately is truly misplaced. If investors agree with my thinking, adding stocks to your portfolio might be a good idea.