Adobe vs. Intuit: Which Beaten-Down Software Stock Is a Better Buy?

Year to date, many once-beloved software stocks have taken a beating as the market reassesses valuations and new risks introduced by artificial intelligence (AI). And two of the most dominant software providers in the market -- Adobe (NASDAQ: ADBE) and Intuit (NASDAQ: INTU) -- have not been immune to the pressure. Both companies boast sprawling ecosystems and "sticky" services, but their stocks have seen sharp pullbacks in 2026.

Both of these stocks' declines may be overdone. After all, both companies continue to deliver strong results -- and they're even finding ways to benefit from AI. But which of these two market leaders is the better buy today?

Image source: Getty Images.

Adobe: AI acceleration and a cheap valuation

In its fiscal first quarter of 2026 (the period ended Feb. 27, 2026), Adobe's total revenue hit a record $6.4 billion, up 12% year over year. And the company's bottom line held up well, with non-GAAP (adjusted) earnings per share jumping 19% year over year to $6.06.

And engagement trends are also exceptional.

"In Q1, we surpassed 850 million monthly active users of Acrobat, Creative Cloud, Express and Firefly, achieving 17% year-over-year growth, a clear indication that we have both strong usage and a foundation for monetization," said CEO Shantanu Narayen during the company's fiscal first-quarter earnings call.

But what the market seems to be missing is the tech giant's success in monetizing its new AI features. During Adobe's earnings call, management noted that AI-first annualized recurring revenue (ARR) more than tripled year over year.

Despite this clear momentum, AI fears have weighed heavily on Adobe stock. Showing just how severe the sell-off has been, it's left shares with a price-to-earnings ratio of just 14.4 as of this writing. For a business of Adobe's caliber, that is an incredibly conservative multiple.

Intuit: faster growth but a pricier valuation

Meanwhile, Intuit is posting even faster top-line growth. In the financial software specialist's fiscal second quarter of 2026 (the period ended Jan. 31, 2026), total revenue grew 17% year over year to $4.7 billion.

Fueling its growth, Intuit's online ecosystem revenue rose 21% year over year during the period.

And like Adobe, Intuit is already utilizing AI to drive its business forward.

"In January alone, our accounting agents saved time and delivered impact for our customers by categorizing over 237 million transactions," noted CEO Sasan Goodarzi during the company's fiscal second-quarter earnings call.

Clearly, Intuit's business is doing well. But things become a bit more concerning when you look at the price tag the market has placed on this growth.

Intuit currently trades at a price-to-earnings ratio of about 26. Its forward price-to-earnings ratio, however, is just 15, suggesting analysts expect significant earnings-per-share growth over the next year. Still, the stock is more expensive than Adobe, with investors pricing in a greater long-term growth story.

The better buy

So, which of the two stocks is the better investment? To me, Adobe looks like the clear winner.

Sure, Intuit is growing slightly faster right now, and its execution with AI integration has been stellar. But Adobe offers investors a wider margin of safety thanks to its deeply discounted valuation. Further, the company's tripling of AI-first ARR suggests the AI risk that drove the stock down may actually be a long-term catalyst.

Intuit is a wonderful company to hold for the long term, but its valuation demands a bit too much optimism today. If I had to choose between these two beaten-down software stocks right now, I'd rather buy Adobe and patiently wait for the market to recognize the durability of its business model.

Of course, there's no guarantee the stock works out. There are a number of risks. For instance, while AI seems to be benefiting Adobe today, there's always a chance that it provides an even greater benefit to some of Adobe's competitors and ultimately negatively impacts Adobe's ability to grow.

Overall, however, I'd argue that the uncertainty Adobe faces may already be priced in after the stock's recent massive beating, creating a good buying opportunity.

Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Adobe and Intuit. The Motley Fool recommends the following options: long January 2028 $330 calls on Adobe and short January 2028 $340 calls on Adobe. The Motley Fool has a disclosure policy.