1 AI Stock Down 14% to Start 2026 That Looks Like an Absolute Bargain Right Now

Core Viewpoint - Adobe's stock has experienced a 14% decline at the start of 2026, but the company is showing resilience against the pressures of generative AI and is seeing strong momentum in its own AI products, making it a potential buy for investors [2]. Company Performance - Adobe's Creative Cloud remains the industry standard for creative professionals, with high switching costs for users who have mastered its tools, making it less susceptible to competition from AI services [4]. - The company has launched Adobe Express, a freemium cloud-based service, to attract amateurs and novices, while also integrating its generative AI software, Firefly, into this platform [5]. - Annual recurring revenue (ARR) grew by 11.5% year over year in 2025, reaching $25.2 billion, with AI-influenced ARR accounting for over one-third of its overall business [6]. - Remaining performance obligations increased by 13% from the end of 2024, reaching $22.5 billion, indicating strong future growth potential [7]. - Adobe's financial results show no negative impact from competing AI tools, and the company is benefiting from integrating generative AI features into its software [8]. Valuation - Adobe's stock is currently trading at 13 times forward earnings expectations, presenting a significant buying opportunity due to its low valuation and strong growth prospects [8].