Wells Fargo downgrades Adobe and upgrades Tyler Technologies

what happened

Seeking Alpha reports that Wells Fargo double-downgraded Adobe, moving the stock to Underweight from Overweight and reducing its price target to $225 from $270. Adobe shares fell 2.6% in premarket trading. Analyst Michael Turrin cited signs of weakness in the 3Q results and the difficulty of delivering a sharp 4Q acceleration, with 4Q NNARR needing to rise to approximately twice the previous quarter’s level.

Wells Fargo also sees incremental risk to Adobe’s preliminary FY27 outlook because the company has not raised prices and remains in a management transition involving its CEO and CFO. A CIO survey indicated that Adobe is a clear budget-share loser during the AI evaluation cycle, while competition in the core creative business is intensifying. Tyler Technologies shares gained 2.5% before the market opened.

Turrin upgraded Tyler to Overweight from Equal-Weight, saying a “majority” of its 2025 bookings headwinds are “transitory” and that 2027 “presents room for reversion.” He raised the price target to $400 from $335 and described Tyler as relatively “AI-resilient/insulated from broader market impacts.” Wells Fargo also lifted targets for ServiceNow to $190 from $175, Palo Alto Networks to $525 from $475 and CrowdStrike to $300 from $235, while cutting Figma to $30 from $34.

why it matters

The revisions highlight a widening distinction within technology software: Adobe faces concerns over execution, competition and AI-related budget allocation, while Tyler received an upgrade tied to expectations that its 2025 booking pressures will ease. The changes may influence sentiment across software and cybersecurity shares.

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