Should Investors Buy Adobe Stock Instead of ServiceNow Stock?

The article is primarily a Motley Fool commentary saying Adobe and ServiceNow are among the least-liked stocks right now and that Adobe was not included in the outlet’s latest top-10 stock list. It cites historical Stock Advisor wins from Netflix and Nvidia and notes a 993% average return versus 207% for the S&P 500, but provides no new operating results, guidance, or valuation changes for Adobe or ServiceNow. Overall, the piece is promotional and sentiment-oriented rather than materially fundamental.

Analysis

The important signal here is not the headline skepticism around the software names, but the market’s willingness to re-rate anything that looks crowded, slow-growth, or dependent on an AI monetization story that has not yet shown through in revenue acceleration. For Adobe, the negative skew is sharper because its installed base creates the illusion of defensiveness while also making it a classic multiple-compression candidate if AI features are perceived as additive rather than monetizable. That sets up a mismatch where the stock can stay cheap longer than valuation bulls expect, especially if management is forced to defend share with heavier product investment.

ServiceNow is more insulated than Adobe because its workflow category still has a longer runway for enterprise expansion, but even there the market is likely discounting that AI assistants can help usage while not necessarily expanding wallet share as quickly as hoped. In other words, AI may improve retention metrics before it improves pricing power, which is a subtle but important distinction for near-term multiple expansion. The second-order winner is not necessarily the application layer; it is whoever sits deeper in the stack and can monetize compute, inference, or control points more directly.

The article’s best contrarian takeaway is that the market may be over-penalizing incumbents that are perceived as “AI at risk” while underappreciating their option value if they can bundle AI into existing distribution. That creates a two-speed setup: near term, sentiment and positioning can keep pressure on ADBE; over a 6-12 month horizon, the stock can rebound sharply if AI features materially reduce churn or lift attach rates without severe margin dilution. For NOW, the risk is less existential and more about patience: the thesis needs a longer proving period, and the stock is likely to react most to evidence of net new ACV rather than product demos.

From a portfolio construction standpoint, this is more attractive as a relative-value expression than a standalone directional bet. The market is rewarding companies with visible AI monetization and punishing those whose AI narrative is still interpretive, so the cleaner trade is to own the stronger monetization vector while fading the weaker one. The key risk to the short side is a surprise acceleration in enterprise software spend or a management commentary shift that reframes AI as direct pricing leverage rather than feature parity.

Key Decisions for Investors

• Short ADBE on strength over a 2-6 week horizon; target a valuation reset if the market continues to treat AI as margin-dilutive rather than monetizable. Use a tight stop if management commentary suggests near-term AI upsell traction.
• Prefer NOW over ADBE in a relative-long/short pair for 3-9 months; NOW has better optionality from workflow expansion, while ADBE faces higher multiple risk from slower perceived AI monetization.
• If trading options, consider a defined-risk bearish structure on ADBE such as a put spread 3-6 months out; the payoff is best if sentiment remains weak but avoids unlimited downside risk.
• Avoid chasing either name on headline AI enthusiasm until there is evidence of revenue conversion, not just feature release cadence; the market can punish narrative-heavy software for multiple quarters.
• For longer-term investors, use any sharp ADBE selloff to build only a partial position and reserve capital for confirmation of attach-rate improvement; the risk/reward is better after proof, not before.