Long-serving Adobe CEO to step down in face of investor angst over AI

SAN FRANCISCO – Adobe chief executive Shantanu Narayen will resign from his position at the creative software giant amid deep scepticism about the company’s ability to thrive in the AI era.

His exit from the role comes after he served as the head of Adobe for 18 years, during which he helped the company’s flagship software, such as Photoshop, Illustrator, Premiere Pro and InDesign, become household products for creatives worldwide.

Mr Narayen will stay on as chair of the board to support the next CEO, the company said. But the announcement of his leaving the helm puts the company in a precarious position as it comes at a time when Adobe is doubling down on artificial intelligence, striking partnerships and exploring acquisitions to extend its industry lead.

Separately, Adobe reported quarterly financial results, with double-digit growth in total revenue and its customer subscription segments, reflecting resilient spending on its product suite.

Adobe is grappling with a changing software landscape, where AI is lowering the barrier to entry for design and its dominant position in the industry is threatened by newcomers embracing the technology.

“Investors will likely focus on whether incoming leadership maintains a balance between disciplined execution and aggressive AI investment, especially as competition in creative and enterprise AI intensifies,” said Emarketer analyst Grace Harmon.

Worries have also flared with the rise of new automated AI tools and agents that many fear could disrupt traditional software subscription models and give way to quicker and cheaper ways of creating products.

While Adobe has bet heavily on AI to bolster its product suite, “investor scepticism about monetisation timing and payoff may have factored into a drop in its share prices”, Ms Harmon said.

Adobe’s shares have fallen around 22 per cent so far in 2026, after declining over 21 per cent in 2025, reflecting investor apprehension over the firm’s AI strategy and outlook.

The company forecast second-quarter revenue between US$6.43 billion (S$8.2 billion) and US$6.48 billion, compared with estimates of US$6.43 billion, according to data compiled by LSEG.

It reported first-quarter revenue of US$6.4 billion, beating estimates of US$6.28 billion.

Creative and Marketing Professionals subscription revenue came in at US$4.39 billion, topping expectations of US$4.32 billion.

Mr Narayen’s departure overshadowed what were otherwise steady results, wrote Mr Anurag Rana, an analyst at Bloomberg Intelligence. “Adobe’s financial metrics have shown little noticeable change since early last year, yet the stock is down almost 40 per cent – likely a key reason for the planned CEO transition.”
BLOOMBERG, REUTERS