Adobe's AI bet

If you can’t beat ‘em—buy ‘em.

Today, Adobe jumped on the AI bandwagon and announced it is acquiring AI search engine optimization software platform Semrush for $1.9 billion.

Shares of Semrush popped 73.96%, while Adobe sank 1.96%.

Adobe’s got artificial intelligence FOMO. The company, which is known for its consumer-facing products like Adobe Photoshop and Adobe Illustrator, has been trying to evolve into an AI-forward design studio to better compete in the brave new world of machine learning.

But while Adobe has rolled out an array of AI tools on its platforms, investors haven’t liked the picture Adobe has been designing. Shares of Adobe are down 28.46% year-to-date, and analysts have begun doubting its ability to keep up with competitors. By buying its own SEO platform, Adobe can take a shortcut to becoming an AI dynamo.

What about the other guy?

Semrush is all about SEO, which once meant enticing Google into pushing a customer’s website higher up on search result webpages. But in an AI-driven world, Semrush has focused on improving search visibility on platforms like OpenAI, which have seen their share of the internet search market climb lately.

That hasn’t translated to huge success for Semrush. Despite today’s impressive rally, the stock remains down 1% in 2025.

Adobe hopes that Semrush can provide it with a one-two punch for companies trying to reach online customers through both traditional search engines and AI platforms.

“Brand visibility is being reshaped by generative AI, and brands that don’t embrace this new opportunity risk losing relevance and revenue,” explained Anil Chakravarthy, president of Adobe’s Digital Experience Business, in a statement.—LB

I argued on Bloomberg TV recently that Adobe needs to make big, bold acquisition moves if it wants to get its stock moving again, but I found today’s announcement that it's buying Semrush anticlimactic. With only around $450 million of annualized revenue compared to Adobe’s more than $20 billion, this doesn’t move the needle for a software giant in an existential crisis. Adobe has very low net debt and the cash flow profile to go do more than tweak around the edges with its acquisition strategy. Listen to today’s episode of the Brew Markets podcast to learn where I think Adobe should be hunting for acquisition targets, and why the time to move is now.—AB