Adobe (ADBE) is getting a new CEO, and Wall Street is not exactly thrilled about it.
The company announced Thursday that Anil Chakravarthy will take over as chief executive in December, succeeding Shantanu Narayen, who has held the role for 19 years. ADBE stock dropped 6.41% on the news, and was down a further 4% in premarket trading Friday. The stock is now down about 20% this year and is trading at less than half its 2024 peak above $600.
Chakravarthy currently leads Adobe’s Customer Experience Orchestration business and worldwide field operations. He joined Adobe in 2020 after serving as CEO at cloud data management firm Informatica. He has been at Adobe for six and a half years.
Narayen announced his plan to step down back in March, which had been fueling months of speculation about who would take his place.
Analysts at Jefferies said Chakravarthy is “not who many expected.” The firm had anticipated the role would go to David Wadhwani, a 19-year company veteran who led Adobe’s creative unit. Wadhwani left Adobe shortly after the announcement.
“With his departure, we expect others to follow as Anil reshapes the organization,” Jefferies analysts wrote. The firm also noted that the board may look to add deeper AI expertise.
Adobe’s stock has been under pressure for some time, with investors worried that AI tools could eat into demand for its core creative products. The leadership change adds another layer of uncertainty.
Jefferies suggested Chakravarthy could be “well tuned to the needs of Adobe’s large enterprise clients,” and said they look forward to hearing his plans for the creative side of the business and how he plans to adapt it for the AI era.
JPMorgan was a bit more upbeat. Analysts there told clients that “in aggregate, we believe the announcement is a positive in relation to addressing the uncertainty.”
Narayen said in a statement he “could not be more confident” Chakravarthy is “the right person to lead Adobe’s growth in an AI-driven era.” Narayen will remain involved as executive chair during the transition.
Adobe pointed to Chakravarthy’s work developing several AI-driven products, including Adobe CX Enterprise, GenStudio, and Brand Visibility, as evidence of his readiness for the top job.
Adobe stock was down 1.4% in after-hours trading when the news broke Wednesday evening.
The company is due to report earnings after the closing bell next Thursday, September 11.
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