Adobe stock falls 7% as company announces new CEO amid leadership shakeup

Adobe shares ADBE fell nearly 7% on Friday after the software company announced a leadership transition on Thursday.

Anil Chakravarthy, president of Adobe's Customer Experience Orchestration business, will become president and chief executive officer on Dec. 1, 2026.

Chakravarthy will succeed Shantanu Narayen, who has led Adobe for more than 18 years. Narayen will transition to the role of executive chair.

Narayen said Chakravarthy is an experienced leader with a deep understanding of Adobe's business.

Chakravarthy said he believes Adobe is positioned for its next phase of growth.

The leadership transition comes as Adobe faces growing pressure from artificial intelligence and competition across the software industry.

The company has been a major player in creativity software, but newer competitors and the emergence of AI-powered tools have created additional challenges for its business model.

David Wadhwani's departure adds to leadership changes

The CEO announcement was followed by news that David Wadhwani will leave Adobe.

Wadhwani, who has led the company's creativity and productivity business for nearly five years, announced his departure in a LinkedIn post.

Wadhwani had been viewed as a potential candidate for the CEO position.

Jefferies analyst Brent Thill said Wadhwani had been considered the logical choice because his business represented about three-quarters of Adobe's revenue. Wadhwani spent 19 years at Adobe across two separate periods.

The departure adds to a broader series of management changes at the company. Adobe's Chief Financial Officer Dan Durn left the company in June.

Thill expects additional changes as Chakravarthy reshapes the organization.

He also said Adobe's board could see changes aimed at adding deeper artificial intelligence expertise as the company deals with challenges from AI.

Adobe's leadership changes come at a critical point for the company.

AI has made it easier for users to create content through a growing range of free and lower-cost tools, increasing competitive pressure on Adobe's traditional products.

Analysts split as Adobe prepares for earnings

Analysts offered mixed views following the leadership announcement.

Barclays raised its price target on Adobe to $295 from $250 while maintaining an Equalweight rating. RBC Capital also increased its target to $315 from $285 and retained an Outperform rating.

Morgan Stanley took a more cautious stance, downgrading Adobe to Underweight with a $240 price target.

The firm cited concerns that artificial intelligence competition could weigh on recurring revenue from Adobe's Creative Cloud business.

Adobe has also faced pressure from competitors such as Canva and Figma as the software market evolves.

The company must increasingly assess how to price its products as AI challenges the traditional software-as-a-service model, which has historically relied heavily on charging based on the number of users or seats.

Shares have already declined 18% through Thursday's close after falling more than 20% in each of the previous two calendar years.

Investors will receive a fresh update on Adobe's financial performance and outlook when the company reports its fiscal third-quarter results on Sept. 10.

The earnings report will come shortly after the leadership announcement and Wadhwani's departure, giving investors an opportunity to assess the company's business trajectory amid the ongoing shift toward AI.