Adobe (NASDAQ:ADBE) shares nosedived 13% this morning, putting the tech giant on track for its worst single-day loss in nine months. This comes despite Adobe posting record Q4 revenue of $5.61 billion and adjusted earnings of $4.81 per share, beating analyst expectations. The real shocker? Adobe's fiscal 2025 revenue forecast of $23.3 billion to $23.55 billion fell short of Wall Street's consensus of $23.78 billion. Investors are questioning whether Adobe's aggressive push into generative AI will deliver financial returns fast enough to justify the hype.

Matthew Swanson, an RBC analyst, pointed out that while Adobe has made bold strides with tools like its Firefly AI suite, the absence of clear monetization metrics is making investors uneasy. Adobe is doubling down on generative AI, with features now integrated into products like Photoshop and Premiere. The company claims 16 billion AI generations, but investors are asking, Where's the revenue? Several brokerages have already slashed price targets, with Morningstar calling out a disconnect between management's enthusiasm and what the market is seeing.

Adobe's underperformance is hard to ignoredown nearly 17% year-to-date against the Nasdaq's 35% surge. With competition heating up from players like Stability AI and OpenAI, analysts are urging Adobe to sharpen its focus on execution and transparency. Whether Adobe can pull off a turnaround in 2025 remains the question on every investor's mind. For now, the stock remains in free fall.