Adobe Names Anil Chakravarthy Its Next CEO as Shares Slide 6.7%

Adobe shares fell 6.7% on Friday after the company named Anil Chakravarthy as its next chief executive, handing the top job to an enterprise-software veteran rather than a leader raised on the creative tools that built the business. The stock closed at $266.51, down from $285.75 the day before.

An internal pick with an enterprise résumé

Chakravarthy will become president and CEO on December 1, the start of Adobe’s next fiscal year, and will join the board. Since December 2021 he has run the company’s Customer Experience Orchestration business and worldwide field operations, the part of Adobe that sells marketing and analytics software to large enterprises. Before Adobe he spent four years as chief executive of Informatica, a data-management firm, with earlier roles at Symantec, VeriSign, and McKinsey. He holds a doctorate from MIT. The board’s vote was unanimous, and its lead independent director, Frank Calderoni, called him the right leader for the company’s next chapter of growth.

He succeeds Shantanu Narayen, who has led Adobe since 2007. Narayen will become executive chair and stay involved through the handover, and he framed the choice as the right one to carry Adobe through an AI-driven era. His run reshaped the company. Adobe moved off boxed software and onto cloud subscriptions on his watch, a shift that turned Creative Cloud and its recurring revenue into the core of the business. That is the model his successor inherits.

Why the market flinched

The choice arrived at an awkward moment. Chakravarthy’s career sits in enterprise data and marketing software. Adobe’s best-known products remain its design applications, which still generate a large share of subscription revenue, and those now face a newer kind of competition: generative-AI tools that produce images and video on demand. Investors have spent much of the past year weighing how well Adobe’s creative franchise holds up as those tools improve. A chief executive drawn from the enterprise side does little to settle that question, and the market read the pick cautiously. The news also landed just days before the company’s quarterly report, which left little time to digest it.

Where the stock stands

Friday’s drop interrupted a steadier stretch. Even after the fall, Adobe is up more than 2% over the past 30 days. Volume ran about 1.6 times the 20-day average as the news moved. The close left the stock roughly 9% below its high of the past three months, and well above its low over that window; the range runs from $193.41 to $292.79. The shares had already spent the summer working lower from that peak, so Friday’s news reached a name that was out of favor with parts of the market.

On the calendar

Adobe reports fiscal third-quarter results on Thursday, September 10, after the close. That is three days away. The report will be the first read on the business since the succession announcement, and the last before the December 1 handover. Any comment from management on the transition will come with it.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.