Adobe's Long-Serving CEO to Step Down, Stock Plummets Over 7% in After-Hours Trading

Source: Global Market Report

American design software manufacturer Adobe announced on Thursday that its long-time CEO Shantanu Narayen will step down following the appointment of a successor. Following this news, the company’s stock fell over 7% in after-hours trading, as market concerns about its strategy intensified amid efforts to address the disruptive impact of artificial intelligence.

Narayen has served as Adobe’s CEO for 18 years, during which he helped establish flagship products like Photoshop, Illustrator, Premiere Pro, and InDesign as household names among creative professionals worldwide.

The company stated that Narayen will continue to serve as Chairman of the Board to support the next CEO. However, the news of his departure still unsettles investors, especially as Adobe is ramping up investments in AI, actively seeking partnerships, and exploring acquisition opportunities to solidify its industry leadership.

Additionally, Adobe released its quarterly financial report on Thursday, showing double-digit growth in both total revenue and subscription services, reflecting strong demand for its product suite.

“Investors may be concerned about whether new leadership can balance rigorous execution with aggressive AI investments, especially as competition in creative and enterprise AI intensifies,” said Grace Harmon, an analyst at Emarketer.

With the rise of new automation AI tools and agents, concerns are growing. Many worry that these tools and agents could disrupt traditional software subscription models and lead to faster, cheaper product development.

Harmon noted that although Adobe has heavily invested in AI to enhance its product portfolio, “investor doubts about AI profitability timelines and returns may be one of the reasons for its stock decline.”

Adobe’s stock has fallen approximately 22% so far this year and over 21% in 2025, reflecting investor concerns about its AI strategy and outlook.

According to data compiled by LSEG, the company forecasts second-quarter revenue between $6.43 billion and $6.48 billion, up from an earlier estimate of $6.43 billion.

The company reported first-quarter revenue of $6.4 billion, exceeding the previous forecast of $6.28 billion.

Adjusted earnings per share were $6.06, higher than the expected $5.87.