Adobe (ADBE.US) fell more than 13% after "blowing up" its earnings

Adobe (ADBE.US) fell over 13% to $478.21 on Thursday after the company reported better-than-expected Q4 revenue and profit, but issued disappointing revenue guidance for fiscal 2025, exacerbating investors' concerns that the creative software giant may be disrupted by emerging AI startups. Adobe expects revenue to be about $23.4 billion in the fiscal year ending November 2025, with adjusted EPS between $20.20 and $20.50. Analysts on average expect revenue of $23.8 billion and adjusted EPS of $20.52. Stephen Bersey, Abhishek Shukla, and Govinder Kumar of HSBC cut their target price to $510 from $536 and maintained a "Hold" rating, saying Adobe is struggling to effectively monetize its AI features. HSBC believes the intense competition in Adobe's creative products area may quickly commoditize its products and erode its competitive advantage.