ADBE vs. GOOGL: Which AI-Driven Tech Stock Has an Edge Now?

Adobe ADBE and Alphabet GOOGL are infusing artificial intelligence (AI) into their core offerings. While Adobe’s ongoing AI push has been helping in advancing the company’s footprint among business, creative and marketing professionals, Alphabet has been infusing AI into its Search and Cloud platform. According to IDC, investments in AI solutions and services are projected to yield a global cumulative impact of $22.3 trillion by 2030. This represents roughly 3.7% of the global Gross Domestic Product and bodes well for both Alphabet and Adobe stocks.However, Adobe or Alphabet, which has an edge right now?The Case for Adobe StockADBE is benefiting from strong demand for AI-powered Creative Cloud Pro and Acrobat, as well as AI-first products, Firefly and Acrobat AI Assistant. The company now targets annualized recurring revenue growth of 10.2% for fiscal 2026, driven by an innovative AI-powered portfolio, expanding adoption of enterprises and a large market opportunity.Adobe has been focusing on strengthening its footprint among marketing professionals through the Adobe Experience platform and apps that power customer engagement and loyalty. GenStudio is strengthening Adobe’s footprint among marketers. Adobe Experience Manager (AEM) and agentic web solutions, including LLM Optimizer, Sites Optimizer and Brand Concierge, are delivering brand visibility and discovery. The Semrush acquisition will enhance Adobe’s expanding portfolio of AI-driven customer experience solutions, including AEM, Adobe Analytics and Adobe Brand Concierge.For fiscal 2025, Adobe expects total revenues between $25.9 billion and $26.1 billion. Adobe expects Business Professionals and Consumers’ subscription revenue between $7.35 billion and $7.4 billion. Creative and Marketing Professionals subscription revenues are expected to be between $17.75 billion and $17.9 billion.However, Adobe’s AI business is minuscule compared with the likes of Microsoft and Alphabet. OpenAI, Salesforce, Midjourney and Canva are other major competitors.The Case for Alphabet StockAlphabet’s initiatives to infuse AI in Search and Google Cloud are noteworthy. The company has been actively embedding AI, especially within Search, to enhance user experience, provide better AI-focused features and consequently improve ad performance. In November, Alphabet launched Gemini 3, its latest state-of-the-art reasoning model. It now powers Search, via AI Mode. Google AI Pro and Ultra subscribers in nearly 120 countries and territories in English can use Gemini 3 Pro by selecting “Thinking with 3 Pro” from the model drop-down menu in AI Mode.Alphabet’s expanding AI infrastructure is helping it win enterprise clients. Google Cloud Platform’s prospects remain robust, driven by strong demand for enterprise AI infrastructure, including TPUs (led by seventh-generation Ironwood) and GPUs, enterprise AI solutions driven by demand for the latest Gemini and other AI models, and other services, including cybersecurity and data analytics. Google Cloud is also benefiting from strong Gen AI adoption due to leading models, including Gemini, Imagen, Veo, Chirp and Lyria. In the third quarter of 2025, revenues from products developed on Google’s Gen AI models surged more than 200% year over year.Accelerating spending on AI infrastructure bodes well for GOOGL stock. For 2025, Alphabet now expects to spend capital expenditures between $91 billion and $93 billion, up from the previous estimate of $85 billion. The company expects capital expenditure to increase significantly in 2026.GOOGL Earnings Estimate Revision Steady, ADBE’s Goes SouthThe Zacks Consensus Estimate for GOOGL’s 2025 earnings is pegged at $10.58 per share, unchanged over the past 30 days, indicating a 31.6% increase over 2024’s reported figure. Alphabet Inc. Price and Consensus Alphabet Inc. price-consensus-chart | Alphabet Inc. Quote The consensus mark for Adobe’s fiscal 2026 earnings has declined by nine cents to $23.44 per share over the past 30 days, suggesting 12% growth over fiscal 2025.  Adobe Inc. Price and Consensus Adobe Inc. price-consensus-chart | Adobe Inc. Quote Both GOOGL’s and ADBE’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters. However, Alphabet’s average surprise of 18.74% is better than Adobe’s surprise of 2.25%, reflecting the good quality of earnings beat on a consistent basis.Stock Price Performance & Valuation: ADBE vs. GOOGLAdobe shares have underperformed the Alphabet stock in a year. The ADBE stock dropped 20.9% while GOOGL surged 63% over the time frame.ADBE and GOOGL Share Price Performance Image Source: Zacks Investment Research  Both Alphabet and Adobe are overvalued, as suggested by the Value Score of D and C, respectively. In terms of forward 12-month price/sales, Alphabet shares are trading at 9.79X, higher than Adobe’s 5.65X.GOOGL and ADBE Valuation Image Source: Zacks Investment Research ConclusionAlphabet is riding on strong cloud and search growth. Its dominant position in the search engine market is a strong growth driver. However, Adobe is suffering from the negative impact of stiff competition in the AI and Generative AI space, offering GOOGL an edge.Currently, Adobe and Alphabet carry a Zacks Rank #3 (Hold) each. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks Naming Top 10 Stocks for 2026Want to be tipped off early to our 10 top picks for the entirety of 2026? History suggests their performance could be sensational.From 2012 (when our Director of Research Sheraz Mian assumed responsibility for the portfolio) through November, 2025, the Zacks Top 10 Stocks gained +2,530.8%, more than QUADRUPLING the S&P 500’s +570.3%.Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2026. Don’t miss your chance to get in on these stocks when they’re released on January 5. Be First to New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Adobe Inc. (ADBE): Free Stock Analysis Report Alphabet Inc. (GOOGL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks