Adobe has near-term fundamental concerns from light Q4 guidance and competitive pressure, despite a strong Q3 beat and a relatively muted stock reaction.

All right, let's talk Adobe. Those shares under pressure off the back of its latest quarterly results and this keeps happening. They beat expectations and the stock sells off. Doesn't matter uh them beating or not. What's the latest here?

>> Yeah, we are seeing the shares down about 4 and a.5% right now in pre-market trading. Q3 revenue came in at $6.76 billion. Uh did exceed the street's expectations and the adjusted earnings per share also did exceed the streets expectations coming in at $6.13.

Street was looking for $69. But the real big concern that you have is actually the revenue guidance moving forward, especially for Q4. It came in actually slightly lighter than the street's expectations.

They are guiding between 6.8 billion and 6.85 billion. Street was looking for around 6.8 uh 6.85 billion. So they did come up a little bit light here. And the concern is that uh they are losing market share to maybe some of the other competitors within the street. not only those that actually sell their products for money obviously, but also premium offers uh within the AI space.

Now, if their AI first ARR revenue did actually grow by 150% on a year-over-year basis, that is a bright spot for them. But also, once again, Diane, it's more of a monetization story.

Are they able to keep their current customers, bring on new customers, and then push prices a little bit higher in order to drive revenue? And right now, seems like the street is still questionable around that.

You also have some leadership shakeups that are taking place as well like it's also probably causing a little bit more volatility within the stock. This drop that we are seeing this morning though has not been as dramatic as what we have seen in the past.

So that could be a little bit of a win. Technically, it's still a higher low on the chart. Uh but once again, not a lot of optimism as to the near-term wins for this company from a fundamental standpoint.