Shares of Adobe (NASDAQ:ADBE) continued to fall last week, closing Friday at $284.56. It's a steep fall
for the tech stock from its 52-week high of nearly $700. A big reason for the selloff is that investors are
being more hesitant on growth stocks. And Adobe's growth has been slowing down.
Although Q3 revenue it reported this month was a record at over $4.4 billion, it rose by just 13% year
over year. A year ago, its growth rate was at 22%. And amid a struggling economy, there are concerns
that its growth numbers could continue to rise at a declining rate in future quarters.
One way the company hopes to add more growth opportunities is through a recent acquisition of Figma,
which provides web applications that make it easy for multiple people to collaborate online on design
projects. But at a price tag of $20 billion, investors weren't thrilled with the valuation, as that meant
Adobe paid about 50 times revenue for the business.
Adobe's stock is now around the lows it reached during the 2020 market crash. If you're a long-term
investor, it could be a good time to consider buying the stock as Adobe's software products, including
Photoshop, are popular and used by professionals all over the world. The strong brands in its portfolio
should make it likely that Adobe recovers from this adversity. And by focusing more on collaboration,
that could unlock a new opportunity.
It may be a bumpy ride for Adobe and other tech stocks as the economy struggles with inflation, but the
company's fundamentals remain strong and this could be a solid stock to buy and hold for the long run.
