Shares of Figma Inc. rose 4.5% on Thursday after HSBC upgraded Adobe (NASDAQ:ADBE), a development market participants interpreted as a sign that concerns over artificial intelligence disrupting established design tools may be exaggerated.
Figma, which emerged as a major competitor to Adobe following its 2025 IPO, has seen its stock slide amid investor anxiety that AI-powered alternatives would erode traditional software demand. HSBC's change in stance toward Adobe, however, has given some investors reason to reassess those fears and provided a lift to Figma's valuation.
HSBC analyst Stephen Bersey moved Adobe from a Hold rating to Buy and set a new price target of $308.00, up from $282.00. The upgrade followed Adobe's report for the second quarter of fiscal 2026, which showed revenue growth of 12.7% year-over-year and a company guidance for fiscal 2026 revenue growth of 11.8%.
"We have yet to see any material impact from AI-powered competitors, and with this report we have revaluated the risk associated with these new competitive threats," Bersey commented. "We believe the market is overestimating the adverse impact of AI-based design tools and that reward now outweighs risks, and recent results continue to be strong."
Adobe also reported a 13.1% year-over-year rise in total remaining performance obligations and current remaining performance obligations in the second quarter of fiscal 2026. The analyst highlighted the stickiness of Adobe's platform, noting user workflow familiarity and the embedding of new AI-powered features as contributors to that resilience.
While Adobe's AI-first revenue expanded threefold year-over-year, that stream accounted for only approximately 2% of second quarter fiscal 2026 revenue. Despite an elevated revenue pace in fiscal 2021 following the pandemic, Adobe's revenue and current RPO growth have since stabilized at a low-double-digit compound annual growth rate, with the company showing no signs in the reported results of significant AI-related disruption.
The market reaction to HSBC's upgrade underscores the sensitivity of design software valuations to perceptions of competitive risk from AI tools. For now, Adobe's recent financial metrics and the analyst reassessment appear to have reduced immediate investor concern, a development that has benefited rival Figma in the short term.
Note: The article reports on HSBC's analyst upgrade of Adobe and associated market reactions; it does not introduce additional data beyond the company's reported second-quarter fiscal 2026 figures and HSBC's stated commentary.