The promise of generative artificial intelligence (AI) hasn't been able to keep Adobe (ADBE) stock afloat over the past year, but long-time shareholders are still sitting on market-crushing returns.
After adding 77% in 2023, shares in the maker of application software for creative types lost about 25% last year, lagging the broader market by a whopping 50 percentage points. And so far
And so far in 2025, the tech stock is down nearly 15% vs a roughly 7% return for the S&P 500.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
If it's any consolation to restive shareholders, many steps forward and a few steps back is sort of par for the course for volatile ADBE stock.
Much of the recent volatility can be attributed to Adobe's embrace of generative AI. For years, the company enjoyed a near monopoly in its niche. Its Creative Suite – which includes the likes of Photoshop, Premiere Pro for video editing and Dreamweaver for website design, among others – really had no peer.
But times change. The emergence of Microsoft's (MSFT) Azure and other cloud-based competitors have taken a bite out of Creative Cloud.
Adobe's suite of products still commands a market share of more than 60%, but there's no question the company – and its shareholders – have been feeling the heat.
Just look at how shares have slowed down over the past few years.
Adobe stock has outperformed the S&P 500 by a wide margin over the course of its life as a publicly traded company, generating an all-time annualized total return of 17.8%. By comparison, the broader market has returned 10.6% over the same span.
The early 2020s have been a different story entirely. A terrible 2022 and an awful 2024 and 2025 have ABDE stock trailing the broader market by wide margins over the past one-, three- and five-year periods.
The bottom line on Adobe stock
Adobe's hot 2023 run was a lot more like what longtime shareholders have come to expect from the large-cap stock.
After all, anyone who plonked down just a thousand bucks into ADBE a couple of decades ago would have enjoyed truly outstanding returns.
Have a look at the chart below and you'll see that a $1,000 investment in Adobe stock 20 years ago would today be worth nearly $16,800. The same money invested in the broader market would theoretically have grown to about $8,300.
True, Adobe stock remains well below its all-time closing high of $688.37 set back in November 2021, but analysts think it can reclaim those levels eventually.
After all, Wall Street is pretty bullish on the name. Of the 41 analysts issuing opinions on Adobe stock surveyed by S&P Global Market Intelligence, 21 rate it at Strong Buy, six call it a Buy, 12 have it at Hold and two say it's a Strong Sell.
That works out to a consensus recommendation of Buy, with solid conviction.
More Stocks of the Past 20 Years
- If You'd Put $1,000 Into Nvidia Stock 20 Years Ago, Here's What You'd Have Today
- If You'd Put $1,000 Into Apple Stock 20 Years Ago, Here's What You'd Have Today
- If You'd Put $1,000 Into Amazon Stock 20 Years Ago, Here's What You'd Have Today
-
Ask the Editor — Tax Questions on Inherited IRAsAsk the Editor In this week's Ask the Editor Q&A, we answer tax questions from readers on the rules on inheriting IRAs.
-
I Asked Experts When It's Worth Splurging on Beauty and Skincare — and When You Can SaveSmart Shopping Experts agree that while you don't have to spend three figures on your products, some higher-priced items have value.
-
Recent Market Volatility Offers Valuable Lessons for InvestorsStocks will always rise and fall, but strategic investors can benefit through dollar-cost averaging, rebalancing in down markets and taking the long view.
-
Retiring Early? This Strategy Cuts Your Income Tax to ZeroWhen retiring early, married couples can use this little-known (and legitimate) strategy to take a six-figure income every year — tax-free.
-
Ditch the Golf Shoes: Your Retirement Needs a Side GigA side gig in retirement can help combat boredom, loneliness and the threat of inflation eroding your savings. And the earlier you start planning, the better.
-
The Best Aerospace and Defense ETFs to BuyThe best aerospace and defense ETFs can help investors capitalize on higher government defense spending or hedge against the potential of a large-scale conflict.
-
Roth IRA Conversions in the Summer? Why Now May Be the Sweet SpotConverting now would enable you to spread a possible tax hit over more than one payment while reducing future taxes.
-
A Financial Expert's Three Steps to Becoming Debt-Free (Even in This Economy)If debt has you spiraling, now is the time to take a few common-sense steps to help knock it down and get it under control.
-
I'm an Insurance Expert: This Is How Your Insurance Protects You While You're on VacationHere are three key things to consider about your insurance (auto, property and health) when traveling within the U.S., including coverage for rental cars, personal belongings and medical emergencies.
-
Stock Market Today: It's 'Most Sectors Go' Ahead of Independence DayThe resilience trade continues to work, even for sectors and stocks with specific uncertainties.
