Adobe's Semrush Move: AI Expansion Amid Valuation Doubts

Adobe (ADBE) stock is under scrutiny as the software giant nears a $1.9 billion acquisition of Semrush, a marketing analytics platform, according to reports from the Wall Street Journal. The deal, which would see Adobe pay $12 per share for Semrush-nearly double its Tuesday closing price of $6.76, has sent Semrush's shares surging over 67% in pre-market trading. If finalized, the acquisition would mark Adobe's first major deal since abandoning its $20 billion Figma bid in 2023.

The move comes as Adobe's stock has lost 24.9% of its value in 2025, raising questions about its valuation. Analysts at Simply Wall St argue the stock is "meaningfully undervalued" based on a discounted cash flow (DCF) analysis, which estimates Adobe's intrinsic value at $580.34 per share-a 42.9% discount to its current price. Meanwhile, the company's price-to-earnings (PE) ratio of 19.9x lags far behind the 38.2x "fair ratio" calculated by the same firm, which accounts for Adobe's growth prospects and industry positioning according to the same analysis.

The Semrush acquisition aligns with Adobe's broader strategy to expand its cloud-based marketing tools. Semrush's platform, which helps businesses optimize search engine visibility and AI-driven campaigns, complements Adobe's existing analytics offerings. The deal could also address investor concerns about AI's impact on Adobe's core creative software business, as Semrush's AI-powered SEO tools are seen as a growth lever.

However, Adobe's stock has struggled amid broader tech-sector volatility. Despite raising its fiscal-year revenue forecast in September 2025, the company faces skepticism over its ability to integrate Semrush successfully. The failed Figma acquisition, which drew regulatory pushback in Europe and the UK, underscores the challenges of large-scale deals in a highly competitive market.

For Semrush, the takeover would represent a lucrative exit for its shareholders, nearly doubling its market capitalization. The company, which went public in 2021, has been promoting AI-driven tools like its recent "AI SEO" suite, targeting marketers navigating the rise of generative AI platforms.

Adobe's stock edged up 0.16% in pre-market trading following the report according to market data, while Semrush's shares climbed toward a nine-month high according to market tracking. Investors will watch closely to see if the deal closes as planned and how it reshapes Adobe's competitive positioning in the AI-driven marketing landscape.