Adobe Is the Better Software Stock Buy in 2026

Adobe closed at $252.23 on September 11 after a third-quarter beat that still could not hold a bid. At 14.08 times trailing earnings, with Salesforce at $247.72 and a $204 billion market cap, the cheaper software stock in this pair is the one still treated as an AI casualty.

Salesforce is the consensus pick because Agentforce is booking real ARR. The books say Adobe converts more of each dollar of sales into profit, buys back stock with cash instead of new bonds, and already trades at a multiple that prices a collapse the latest quarter did not deliver.

Adobe Just Printed Another Record and the Stock Still Flinched

On September 10 Adobe reported fiscal third-quarter revenue of $6.76 billion, up 13% as reported and 12% in constant currency, with non-GAAP diluted earnings of $6.13 a share, up 15%, and GAAP earnings of $4.62, up 11%. GAAP net income was $1.83 billion. Shares still dropped 2.37% on the print, then bounced 1.37% on September 11.

THE Q3 PRINT

• Ending ARR: Total Adobe ARR reached $27.50 billion, up 11.2% year over year.
• AI-first ARR: The AI-first book exceeded $650 million and grew more than 150% year over year.
• Cash and buybacks: Operating cash flow hit a quarterly record of $2.52 billion, and Adobe bought back about 9.5 million shares.
• Users: Monthly active users crossed 1 billion, up more than 20%, including 100 million creative freemium users, up more than 70%.

Customer-group subscription revenue was $6.56 billion, up 14%. Creative and marketing professionals contributed $4.65 billion, up 13%, and business professionals and consumers contributed $1.91 billion, up 16%. Firefly ending ARR across the app and credit packs rose 40% from the prior quarter. Interim CFO Steven Day said the company was raising full-year revenue and earnings targets, and Q4 revenue was guided to $6.80 billion to $6.85 billion, with non-GAAP earnings of $6.30 to $6.35 a share.

The miss the tape cared about was not the beat. Remaining performance obligations were $22.16 billion, up only 8%, and net new ARR fell 36% year over year as Adobe pushed a free plan and delayed price changes on Creative Cloud. Analysts on Hold, 40 of them, still sit at a $279.05 average target, 10.63% above the September 11 close. That is a shrug, not a rerating.

What $100 Billion Buys Versus $204 Billion

Adobe’s market cap is $100.26 billion. Salesforce is about twice as large at $204 billion, on a share price only a few dollars apart. Financial Modeling Prep puts Adobe’s forward P/E at 11.3 times and Salesforce’s at 14.8 times, with price-to-sales at 4.6 times versus 4.1 times. Trailing earnings tell a harsher story for anyone still paying up for the CRM: Adobe’s 14.08 multiple sits 68% below its 43.61 ten-year average, and the stock is 32.0% under its $370.86 52-week high. Salesforce is 7.9% under its $269.11 high.

THE LATEST FULL YEARS, SIDE BY SIDE

Adobe’s fiscal 2025 annual report shows subscription fees of $22.90 billion, 96% of sales, Digital Media revenue of $17.65 billion, up 11%, and Digital Experience revenue of $5.86 billion, up 9%. Total Adobe ARR exited the year at $25.20 billion, up 11.5% from $22.61 billion. Operating cash flow was $10.03 billion and the company bought back about 30.8 million shares. Cash ended at $5.43 billion. Trailing-twelve-month figures through the August 28 quarter now sit at $25.97 billion of revenue, $7.28 billion of net income, $17.91 of diluted EPS, and $10.59 billion of free cash flow, on 397.50 million shares.

Salesforce is the larger cash machine in dollars. It is not the higher-quality one. Fiscal 2026 free cash flow of $14.4 billion came with stock-based pay equal to 23.4% of the $15.0 billion of operating cash flow, a 20.1% operating margin, and an 18.0% net margin. No customer was more than 10% of sales. Remaining performance obligations were $72.4 billion, up 14%. The January 31 balance sheet showed debt-to-equity of about 0.3 times and a current ratio of about 0.8 times, before the debt-funded buyback that followed.

Firefly Jumped 40% as Billings Slowed

The fear that crushed Adobe’s multiple is that generative tools from ChatGPT, Canva, and a dozen video startups would hollow out Photoshop, Premiere, and Acrobat. The AI-first book above $650 million, Firefly ARR up 40% quarter over quarter, and 1 billion monthly active users are the rebuttal from inside the company. Commercially safe Firefly models are trained on data Adobe has rights to use, carry Content Credentials, and, on some enterprise plans, come with intellectual-property indemnification.

That is also why net new ARR fell 36%. Adobe is stuffing the top of the funnel with free seats, then trying to sell credits, Pro plans, and enterprise Firefly later. Creative freemium monthly active users are 100 million. Acrobat plus Express monthly active users are 900 million, up more than 25%. The bet is that a billion people inside the apps matter more than a year of deferred price rises. The billings line has not yet agreed.

GenStudio, Experience Manager, and Experience Platform still posted ending ARR growth of more than 20% each, and the Semrush deal, about $1.9 billion with roughly $480 million of ARR, is now inside the Digital Experience mix. On June 25 Adobe agreed to buy Topaz Labs, whose enhancement models are meant to sit inside Firefly, Firefly Services, and Creative Cloud after a close expected in the fourth quarter. That is not a wipeout. It is a company paying to keep the creative desktop as the place those models run.

Agentforce ARR Crossed $1.5 Billion With an Asterisk

Salesforce’s AI story is easier to put on a slide. In the second-quarter fiscal 2027 results for the period ended July 31, Agentforce and Data 360 ARR reached nearly $3.9 billion, up more than 210%, and Agentforce ARR itself exceeded $1.5 billion, up more than 240%. Combined they had been $2.9 billion at the January 31 year-end, with Agentforce at $800 million, up 169%, after 29,000 Agentforce deals in the first 15 months. Data 360 ingested 104 trillion records in the quarter, up 355%.

We just delivered one of our best quarters ever, outperforming across every key metric. AI is delivering value across every layer of our platform. We’re seeing incredible demand for our AI and data products, with ARR about to cross $4 billion.

Marc Benioff, Chair and CEO, Salesforce second-quarter fiscal 2027 results

Two footnotes sit under that $1.5 billion. From this quarter on, Agentforce ARR includes Slackbot and Headless 360, so part of the jump is a wider definition, not only new seats. Informatica, bought for $9.6 billion in November 2025, contributed $456 million of quarterly revenue and $440 million of subscription revenue, and management said it will add slightly more than 3 points to full-year growth. President and CFO Robin Washington said net new annual order value growth was the strongest in four years. The core Sales and Service clouds are still the ballast; Marketing, Commerce, and Tableau have been the soft spots.

The Agentforce name is already being peeled off the clouds it was stamped onto in October 2025, when Sales Cloud became Agentforce Sales and a dozen other products got the same prefix. Renaming a mature CRM suite does not create a new software category, and putting the old names back is a quiet admission that customers still buy Sales and Service. Slackbot users grew more than 150% quarter over quarter, and Salesforce has delivered 7.0 billion Agentic Work Units, 3.2 billion of them in Q2. Usage is real. The branding is not the product.

Salesforce Funded a $25 Billion Buyback With New Debt

Q2 revenue was $11.3 billion, up 11%, with subscription and support of $10.8 billion, up 12%. GAAP operating margin was 20.5% and non-GAAP 34.1%. GAAP diluted EPS of $4.29, up 119%, and non-GAAP EPS of $5.90, up 103%, included $2.6 billion of gains on strategic investments, which will not repeat on a schedule. Operating cash flow was $1.3 billion, up 71%, and free cash flow was $1.1 billion, up 81%, after $171 million of capital spending. Trailing-twelve-month revenue through July was $43.9 billion and trailing free cash flow was $15.2 billion.

THE COST OF THE ASR

• The buyback: Salesforce is running a $25 billion accelerated share repurchase that initially delivered 103 million shares, and it bought back $27.3 billion of stock in the first half.
• The debt: Noncurrent debt rose to $39.3 billion at July 31 from $10.4 billion at January 31, while equity fell to $38.4 billion from $59.1 billion.
• The interest bill: Interest expense was $473 million in the quarter, up from $67 million a year earlier.
• The non-GAAP gap: Full-year guidance still adds back stock-based pay equal to 9.0% of revenue, or $4.96 a share, to reach a 34.3% non-GAAP operating margin from 20.1% GAAP.

Guidance for fiscal 2027, which ends January 31, 2027, is now $46.1 billion to $46.4 billion of revenue, up 11% to 12%. The $200 million raise is $100 million of organic growth plus $200 million from pending Contentful and Fin deals, minus a $100 million currency headwind. Cash-flow growth is guided to about 4% to 5%. Q3 revenue is guided to $11.42 billion to $11.50 billion. Investor Day is set for September 16 at Dreamforce. Adobe, by contrast, paid for its 9.5 million-share Q3 buyback from operations and still has $24.55 billion left on the April 2026 authorization, against a current ratio of about 1.0 and debt-to-equity of about 0.6 times at the November 2025 year-end. Cash and short-term investments were $5.64 billion exiting Q3.

Adobe’s 30% Net Margin Still Has No Match Here

Hold the two income statements next to each other and the multiple gap looks backwards. Adobe kept 30.0 cents of net profit on every dollar of fiscal 2025 sales and ran a 36.6% operating margin and an 89.3% gross margin. Salesforce kept 18.0 cents and ran a 20.1% operating margin and a 77.7% gross margin. Adobe’s $9.85 billion of free cash flow on $23.77 billion of sales is a fatter cash yield than Salesforce’s $14.4 billion on $41.5 billion, even before counting stock-based pay.

That is the whole argument for owning Adobe at $252.23. The market is paying 14.08 times earnings, versus 11.3 times forward on the FMP snapshot, for a subscription business that still grew revenue 13% last quarter and 11% last year. It is paying 14.8 times forward earnings for a larger CRM that grew 9.6% last year and 11% last quarter with a 3-point acquisition tailwind, a current ratio that was already under 1.0 in January, and a debt load that roughly quadrupled to fund the ASR. Price-to-sales is the one screen Salesforce wins, 4.1 times versus 4.6 times, because it is bigger and less profitable.

Both companies face the same AI cost stack: model licenses, GPU time, and the risk that generated output is wrong or biased. Adobe settled subscription-transparency suits and still lives under global consumer rules. Salesforce is still digesting Informatica and has two more deals in flight. Those are real. They are already more visible in Salesforce’s interest line than in Adobe’s net margin.

Chakravarthy Inherits a Franchise Already Marked Down

Anil Chakravarthy, currently president of the customer-experience business, becomes CEO on December 1, with Shantanu Narayen moving to executive chair after 18 years in the top job. Steven Day remains interim CFO. The next print is the Q4 and fiscal 2026 call on December 9. That handoff is one reason the multiple is stuck, and it is also why a 14.08 times earnings price is doing a lot of the waiting for you.

THE DATES THAT MOVE THESE TWO STOCKS

1. November 28, 2025: Adobe’s fiscal 2025 year ends with $23.77 billion of revenue and $25.20 billion of ARR.
2. January 31, 2026: Salesforce’s fiscal 2026 year ends with $41.5 billion of revenue and $800 million of Agentforce ARR.
3. April 2026: Adobe authorizes a $25 billion repurchase program.
4. June 25, 2026: Adobe agrees to buy Topaz Labs.
5. July 31, 2026: Salesforce’s second quarter ends; Agentforce ARR tops $1.5 billion under a wider definition.
6. August 26, 2026: Salesforce reports Q2, raises fiscal 2027 revenue to $46.1 billion to $46.4 billion, and keeps the $25 billion ASR in motion.
7. September 10, 2026: Adobe reports Q3, raises full-year targets, and watches the stock fall on the 36% drop in net new ARR.
8. September 16, 2026: Salesforce holds Investor Day at Dreamforce.
9. December 1, 2026: Chakravarthy becomes Adobe CEO.
10. December 9, 2026: Adobe reports Q4 and the full 2026 year.

If Agentforce keeps compounding after the Informatica and Slackbot mix is stripped out, Salesforce can grow into its 14.8 times forward multiple. The stock already trades as if that is the base case. Adobe trades as if Photoshop is optional. The September 10 quarter, the $650 million AI-first book, and a 30.0% net margin say it is not. At $252.23, 32.0% below the 52-week high and 68% below the ten-year earnings multiple, the better buy is the one the market has already punished.

Disclaimer: This article is news reporting and analysis for information only, not a personal recommendation to buy or sell Adobe or Salesforce shares. It does not constitute investment, tax, or trading advice and is not a substitute for a plan that fits a reader’s own time horizon and risk limit. Consult a licensed financial adviser or broker before acting on any comparison of these stocks. Share prices, multiples, guidance, deal closings, and leadership dates change, and the figures here reflect the company filings and market data cited as of the dates given in the piece.