BofA flags Adobe’s growth and pricing power risk as generative AI lowers barriers to content creation

Adobe’s outlook is drawing fresh scrutiny from Bank of America, which says generative artificial intelligence is starting to change the competitive baseline for creative software and could weigh on the company’s growth trajectory over time.

In coverage reinstated by BofA, Adobe was assigned an Underperform rating with a $190 price target. The core argument is that generative AI reduces the time and technical skill required to create marketing and creative assets, which can lower the barriers to entry for alternatives to traditional editing and design workflows.

BofA’s note frames the risk as both a volume and pricing challenge. As AI-native tools make content creation cheaper, the bank expects customers to face more choices, potentially increasing competitive pressure on Adobe’s pricing power, particularly in areas where Adobe has historically benefited from broad adoption and ecosystem lock-in.

The bank also highlights the way generative AI alters cost structures for competitors. Where software providers previously had to differentiate on sophisticated tools and professional workflows alone, AI-native offerings can compete by producing draft content quickly and at lower incremental cost, according to BofA’s discussion.

Adobe, for its part, has built its business around tools used by designers, marketers, and enterprises, including creative software and related services. In this context, the central question for investors is whether Adobe can retain its premium positioning as customers add or shift workflows toward AI-generated drafts and automated creative assistance.

Generative AI is already shaping how creative work is produced, from ideation to first drafts to iterations. That shift can be beneficial for established platforms if they integrate AI into existing products and monetize new capabilities, but it also creates a risk that some customers will experiment with alternative tools that perform overlapping tasks more cheaply.

Still, the market note does not provide new, company-specific disclosure from Adobe, such as changes to guidance, pricing, product roadmaps, or customer churn. In the excerpts circulated, BofA focuses on forward-looking competitive dynamics rather than citing a concrete near-term deterioration in Adobe’s reported results.

What to watch next is whether Adobe’s product strategy and pricing reflect these competitive concerns, including how quickly it expands generative AI features inside its creative suite and whether enterprises and professional users continue to treat Adobe as a primary workflow platform rather than a secondary one.