Adobe Earnings to Be Released After Today’s Close: Can Clinging to Nvidia’s Coattails Save a More Than 30% Slump?

TradingKey - Adobe shares were flat ahead of earnings as the market focuses on its collaboration with Nvidia and whether its AI tool Firefly is profitable.

On June 11, Eastern Time, during pre-market trading, Adobe ( ADBE) will release its fiscal 2026 second-quarter earnings after the bell. Shares are currently flat, up only 0.06% at $233, remaining near five-year lows. Will the upcoming earnings report provide much-needed relief for the design empire, or will it be an irreversible "Kodak-style" tragedy?

Adobe stock price chart, Source: TradingView

Since the beginning of the year, capital has fled Adobe following the disruptive "dimensional strike" from OpenAI's Sora and the rapid erosion of the design market by generative AI like Midjourney. In early June, the stock suffered a relentless sell-off, marking a staggering eight-day losing streak and plunging on high volume to around $233, bringing its year-to-date decline to 33%.

Historically, a key bearish argument for Wall Street was that every time a user clicks "Generative Fill" in Photoshop, Adobe incurs high cloud computing costs, which severely erodes gross margins. Currently, the market is hoping the company can leverage Nvidia's ( NVDA) RTX Spark architecture to reduce its cloud capital expenditures and liberate its profit margins.

At the recently concluded Computex 2026, Nvidia CEO Jensen Huang introduced the disruptive RTX Spark chip architecture and revealed that Adobe is a core partner, already re-architecting Photoshop and Premiere Pro for the platform. This partnership is seen as a "lifeline" for Adobe and has become a focal point for the company's conference call.

Furthermore, Wall Street is eager to see if Adobe's AI tool Firefly is actually making money. If on-device AI can be implemented, it would mean lower latency and a smoother experience, providing Adobe with the leverage to convince enterprise clients and professional designers to "upgrade to higher-priced subscription plans," thereby driving a surge in Digital Media Annualized Recurring Revenue (ARR) and helping the stock recover.

Currently, Wall Street is significantly divided on Adobe's ratings, though price targets generally remain above the current price. Specifically, Citigroup ( C) maintains a Neutral rating with a price target of $264; Mizuho Securities downgraded its rating to "Neutral" and lowered its target price to $270 ahead of the earnings report; TD Cowen maintains a "Hold" rating but cut its price target from $310 to $285 on the eve of the announcement.