Adobe shares drop 7% after naming Anil Chakravarthy CEO

Adobe announced Thursday that Anil Chakravarthy will become president and chief executive officer on Dec. 1, 2026. The company said Shantanu Narayen will transition from CEO to executive chair. Shares fell nearly 7% on Friday after the announcement.

Chakravarthy currently leads Adobe’s Customer Experience Orchestration business. Narayen described Chakravarthy as ‘an experienced leader with a deep understanding of Adobe’s business.’ Chakravarthy wrote that he believes Adobe is positioned for its next phase of growth.

The leadership change was followed by the departure of David Wadhwani, who led Adobe’s creativity and productivity unit for almost five years. Wadhwani wrote on LinkedIn that he is leaving after 19 years at the company across two periods. Jefferies analyst Brent Thill noted that Wadhwani had been seen as a logical choice for CEO because his unit accounted for about three-quarters of Adobe’s revenue. Thill also expects additional leadership changes and suggested the board could add directors with deeper artificial intelligence expertise.

Investors moved quickly after the announcement. Adobe’s stock declined nearly 7% on Friday, adding to a roughly 18% drop through Thursday’s close following declines of more than 20% in each of the previous two calendar years.

Analysts issued mixed reactions on outlook and valuation. Barclays raised its price target to $295 from $250 and kept an Equalweight rating. RBC Capital Markets lifted its target to $315 from $285 with an Outperform rating. Morgan Stanley downgraded Adobe to Underweight and set a $240 target, citing concerns that competition from AI tools could pressure recurring revenue from Creative Cloud’s per-user pricing.

Adobe has recorded other recent management changes. Chief Financial Officer Dan Durn left in June, and Wadhwani’s exit adds to the leadership reshuffle. Executives and analysts have pointed to a need to balance investment in generative AI with the company’s subscription pricing as lower-cost and free AI content tools enter the market.

Adobe is scheduled to report fiscal third-quarter results on Sept. 10. That release will provide updated details on sales, margins and the company’s outlook as the new leadership team prepares to take effect.