Adobe (ADBE) is seeing upward momentum on Monday morning due to a combination of “macro-to-software” sector rotation and positioning ahead of the firm’s earnings report.
On June 1st, ADBE looks headed to challenge its 100-day moving average (MA), with a “decisive” break above the $262 level expected to strengthen the bullish sentiment in the days ahead.
Versus its April low, Adobe stock is currently up some 20%.
Broad software sector rebound drives Adobe stock higher
The entire SaaS (Software-as-a-Service) sector is experiencing a huge relief rally today – breaking out of a prolonged period of compressed valuations that defined much of early 2026.
Blockbuster earnings and raised artificial intelligence (AI) guidance from peer software giants like Snowflake and MongoDB have successfully eased Wall Street’s “SaaSpocalypse” fears.
In recent months, investors have been concerned that generative AI could “cannibalize” traditional enterprise software demand.
However, following a robust earnings season, investors are now rotating capital out of red-hot semi names and back into fundamentally strong, oversold software players like ADBE stock.
ADBE shares are rallying on pre-earnings positioning
With Adobe set to post its Q2 earnings on June 11th, institutional investors and options traders are actively adjusting exposure.
The put-to-call ratio on contracts expiring next Friday (a day after ADBE’s quarterly release) sits at 0.24 currently – indicating a strong bullish skew – with the upper price calling for another 9.43% rally through June 12th.
Wall Street will be looking specifically for proof that the company’s AI-first annualised recurring revenue (ARR), anchored by its Firefly generative artificial intelligence studio and newly launched CX Enterprise agentic platform, is scaling rapidly toward the next $1 billion threshold.
Adobe Inc is ‘dirt cheap’ at current levels
Heading into Monday, Adobe shares were down about 23% versus their year-to-date high, prompting deep value investors and major funds like Harris Associates and Oakmark to see them as a bargain.
ADBE is currently going for less than 13x forward earnings, which makes it rather inexpensive to own relative to its 12% year-on-year revenue growth and massive 850 million monthly active users.
More importantly, the firm’s management has repeatedly framed AI as an unprecedented tailwind rather than a structural threat in recent months.
The $25 billion buyback floor
ADBE shares are staging a comeback also because the recently announced buyback plan, worth as much as $25 billion, continues to serve as a strong psychological backstop.
At current levels, this repurchase authorization is structured to eliminate at least 20% of the firm’s outstanding float by the end of this decade, offering a huge mechanical boost to per-share earnings.
How Wall Street recommends playing Adobe Inc
Heading into the quarterly print on June 11th, Wall Street analysts remain largely bullish on Adobe stock.
The consensus rating on ADBE sits at “moderate buy”, with the mean price target of roughly $317 indicating potential upside of another 19% from here.
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