11:03 AM EDT, 09/08/2025 (MT Newswires) -- Adobe (ADBE) is expected to report "solid" fiscal Q3 results, although investor sentiment remains cautious, focused on competition and how the company monetizes its generative artificial intelligence offerings, RBC Capital Markets said in a note Sunday.

The company is set to report the results after the market closes on Thursday.

Analysts, including Matthew Swanson, said that so far this quarter, investor confidence has cooled, erasing the building momentum from Q2. Across the software sector, companies have generally outperformed in Q2 of the calendar year, surpassing revenue estimates by around 3.1% on average, and guidance for Q3 revenue has also been revised upward.

However, GenAI monetization has weighed on investor sentiment through 2024 and into 2025, reflected in Adobe's stock being down 16% since its Q2 results, compared to only 5% for megacap peers and a 7% gain in the S&P 500, the analysts added.

The appointment of Doug Clark as Adobe's new vice president of investor relations this quarter should help clarify the evolving narrative around GenAI monetization, the analysts said.

The analysts said that over the next year, they believe Adobe is well-positioned to outperform peers. The integration of its Experience Cloud and Creative Cloud platforms continues to strengthen its differentiation in the enterprise sector, and competitive concerns do not justify its current valuation discount.

"We also continue to view generative AI as both a near- and long-term benefit to both the creative and experience businesses, which we think can be a catalyst to 2025 revenue growth and also improve overall investor sentiment," the analysts said, adding that overall, Adobe combines growth, margin, and macro resilience that positions it well through 2025.

RBC adjusted its price target on Adobe to $430 from $480 while keeping its outperform rating.

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