Adobe and Salesforce: The Tech Rebound Story Nobody's Talking About in 2026

When Market Darlings Fall Behind

2025 was the year AI took over tech stocks, but not everyone got invited to the party. While the broader technology sector soared, two enterprise software giants – Adobe (ADBE) and Salesforce (CRM) – stumbled, each dropping roughly 20% through the year. Overlooked in the AI euphoria, these companies now present an interesting dynamic heading into 2026: both possess the fundamentals for a meaningful recovery, but their paths and market positioning reveal a fascinating competitive relationship.

Adobe’s AI Integration Strategy Paying Off

Adobe’s ecosystem – Photoshop, Illustrator, Premiere Pro, Acrobat – forms one of the stickiest product suites in software. Users don’t casually switch; they’re locked in through workflow habits and creative processes refined over years.

What’s changed recently is how Adobe is embedding artificial intelligence directly into these tools. Automation and generative capabilities are no longer bolt-on features; they’re woven into daily workflows. The numbers tell the story: Adobe posted record Q4 sales this past quarter, with nine consecutive quarters of double-digit year-over-year revenue growth. Full-year FY25 showed broad-based momentum across all segments, translating into robust annual recurring revenue (ARR) expansion.

The Valuation Argument

Here’s where Adobe gets interesting for 2026. At 14.2X forward earnings, the stock trades at nearly a 40% discount to the S&P 500 average – a significant gap for a company with this level of competitive moat. Consensus estimates point to 12% adjusted earnings-per-share growth in FY26 and 13.4% growth in FY27. That combination of reasonable valuation plus growth guidance is rare in today’s AI-obsessed market.

Salesforce’s Operating Leverage Inflection

Salesforce operates differently but occupies equally sticky terrain. As the world’s dominant cloud-based Customer Relationship Management platform, CRM handles customer data management, sales automation, marketing operations, and service workflows for enterprises globally. Switching costs are brutal – deeply integrated into business operations.

Salesforce’s latest quarterly performance revealed several signals worth watching. The remaining performance obligation – essentially committed future revenue – surged 12% year-over-year to $59.5 billion, suggesting strong underlying customer commitment. Operating cash flow jumped 17% YoY to $2.3 billion, demonstrating that growth is translating into actual cash generation.

The company returned capital aggressively: $3.8 billion in share buybacks and $395 million in dividends during the period. More significantly, Salesforce raised its FY26 sales guidance after the earnings release, reversing months of negative sales-revision momentum. The new forecast calls for 9.5% year-over-year sales growth in the current fiscal year – steady, if not spectacular.

The Competitive Relationship and 2026 Outlook

Both companies occupy the “mission-critical software” category where customer switching is economically painful. Both are exposing their platforms to AI capabilities in ways that increase user stickiness. Yet they’re approaching the market differently – Adobe through creative professionals and content workflows, Salesforce through enterprise operational efficiency.

The irony is that 2025’s market indifference created an opportunity. After a year of being sidelined while AI hype concentrated in narrower pockets, Adobe and Salesforce now carry reasonable valuations attached to genuine product momentum. Their recent quarterly earnings didn’t just meet expectations; they signaled renewed customer demand for their specific value propositions.

The Setup for a Rebound

For investors eyeing 2026, the stage appears set for both stocks to reverse course. Neither company faces existential challenges – both generate reliable cash flows, maintain pricing power through product stickiness, and continue integrating AI into their competitive advantages. Their underperformance in 2025 wasn’t driven by fundamental deterioration but rather by market rotation away from established software toward narrower AI plays.

Adobe and Salesforce represent the kind of “comeback” narratives that tend to play out once market attention cycles. Keep close watch on both throughout the new year.