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Why Adobe's Stock Is Falling Today

By Chris Neiger – Sep 4, 2020 at 2:03PM

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Investors are taking some of the profits they've made over the past few months.

What happened 

Shares of Adobe Inc. (ADBE -1.12%) fell today as investors continued yesterday's market sell-off. After a few months of skyrocketing share prices, many tech investors are selling their shares and locking in their profits.

Adobe's stock fell by as much as 7.1% today, but as of 1:47 p.m. EDT, the company's stock was down 4.3%. 

So what 

The S&P 500 has experienced significant gains over the past few months, led mostly by tech stocks. Investors have flocked to the technology sector as the coronavirus pandemic has forced people to spend more time at home. 

A red line graph going down on a red background.

Image source: Getty Images.

Adobe has been one such tech company that's benefited from an increase in investor sentiment over the past few months, with its share price rising 60% since the beginning of this year. But the company's stock has taken a hit over the past two days, as many investors cash in on the phenomenal growth Adobe and other tech stocks have made. 

But even with yesterday's and today's share-price slide, Adobe's stock is still up 46% this year.  

Now what 

The U.S. is still reeling from COVID-19 and a pandemic-induced recession. The current economic situation is likely the cause of more volatility in the markets in the coming months, even if the recent sell-off subsides soon. Investors should remember, though, that Adobe's stock-price dive today doesn't have anything to do with the company's underlying business or its long-term prospects.

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Adobe Systems. The Motley Fool has a disclosure policy.

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